Asked by Abdullah Ghzzai Ghazi Albeladi on Jun 13, 2024

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In the circular-flow diagram,

A) factors of production flow from government to firms.
B) income paid to the factors of production flows from firms to households.
C) goods and services flow from households to firms.
D) inputs and outputs flow in the same direction as the flow of dollars, from households to firms.

Circular-flow Diagram

A visual model in economics that shows how money, goods, and services flow through the economy between households and firms.

Factors Of Production

The assets utilized in creating goods and services, encompassing land, work, money, and business initiative.

Income Paid

The total earnings received by individuals or entities for their labor, investment, or property use.

  • Master the concept behind the circular-flow diagram and its comprising elements.
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KN
Katie NguyenJun 19, 2024
Final Answer :
B
Explanation :
In the circular-flow diagram, firms pay households for the factors of production (such as labor, land, and capital) that households provide. This payment is the income (wages, rent, interest, profits) that flows from firms to households.