The two-sector circular flow drawn as a WA scene: a household and local market on one side, a mine operation on the other, money and product circling between them
Year 7 · Unit 02 · Lesson 04

Round and Round: The Circular Flow

One idea must land: households and businesses are interdependent — one sector's sneeze becomes the other's cold.

Lesson 3 ended with a loop nobody could close — wages flow into town, and then…? Today it closes. A $50 note leaves the Jindarra pay office in Dana’s pocket at Thursday 4pm, and the class writes its journey hop by hop until the board reveals what shape they’ve been drawing all along: a circle. Students become economy mechanics — they build the machine, then break it to see how it works.

Spark

Follow the fifty

Harvest the Lesson 3 seeds, then launch — say it exactly: “A $50 note, fresh from the Jindarra pay office, Thursday 4pm, in operator Dana’s pocket. Where does it go next?” Pairs add one hop each around the room; the rule is strict — who pays whom, for what. Scribe every hop on the board.

The reveal question: “every hop passed between a PERSON and a BUSINESS — what shape have we drawn?” They built the model before hearing its name. That order matters.
Core

Name the machine

Show the hero — the flow as a WA scene — and formalise: two sectors, four flows, money circling one way, real things the other. Students label the diagram, then sort six pieces of traffic onto their arrows: Dana’s shift, her pay, the boots, the box, the café owner’s own shift… and the haircut.

The haircut is deliberate bait — a service rides the goods arrow with nothing in a box. Let them argue it before you settle it; the argument is the learning.
Workshop

Storm testing

One storm card per team: the night shift (forty new jobs), the spending freeze (households halve spending), or the store closes. Teams trace the ripple four steps minimum, all the way around the circle, and present the chain aloud.

When a team’s chain shows households hurting businesses hurting households — name it there, in their example: interdependence. The descriptor’s own word, discovered rather than defined.
Land it

Exit ticket

The whole machine sketched from memory — two boxes, four arrows, all labelled (the honest test of the lesson) — interdependence proven with Dana and the store, and the Lesson 5 seed: the mine, the town store, and a one-ute prospecting outfit are all “businesses”… who actually owns each?

Teacher intel

If every household saved every dollar for a month — what happens to the store? Then to wages? Then to households?
Which arrow would you rather control — and what does that make you?
The café owner works in her own café — which box is she standing in? (Both: people wear both hats.)
Did our fifty ever leave town in your story? Where could it have escaped?
Watch for“Money gets used up” (it circulates — the fifty is still moving) · “businesses have money, households don’t” (it flows both ways constantly) · “the diagram is one person” (whole sectors — Dana stands for every household in WA).
Running shortTwo storm cards across the class instead of three; harvest one ripple chain aloud instead of presentations. Protect the fifty relay, the labelled diagram, and the from-memory exit sketch.
SupportDiagram with the two money arrows pre-labelled — that team completes the real-flow pair and goes straight to sorting.
ExtendThe leak hunt: the two-sector model pretends the loop is sealed. Where does real money escape — online shopping, savings, tax? Every model lies a little; good analysts know where.