(06.05 HC) Circular flow chart showing connectivity, with blue arrows, from Government to Product Market and Household, from Product Market to Household, Business and Rest of World, from Household to Government and Financial Market; from Business to Factor Market and Product Market, from Factor Market to Rest of World and Household, from Rest of World to Product Market and Factor Market.

Look at the circular flow diagram. Choose and define an environmental issue. Using the diagram as a guide, explain how the environmental issue you chose affects the relationship between product market and rest of world.