What do you mean by circular flow of income and product?

Flow of money income or flow of goods and services across different sectors of the economy in a circular form

The correct answer is Option 3: Flow of money income or flow of goods and services across different sectors of the economy in a circular form

The circular flow model demonstrates how money moves through society. In the circular flow model, households and firms are the main economic agents, and they interact through two main markets: the product market and the factor market. Households supply factors of production (such as labor, land, and capital) to firms in the factor market, and in return, they receive factor income (wages, rent, interest, and profit). The firms then use these factors of production to produce goods and services, which they sell to households in the product market. The households, in turn, spend money to buy these goods and services, completing the circular flow of income and product.