Asked by Emalea Felders on Jun 15, 2024
Verified
The inner loop of the circular-flow diagram represents the flow of inputs and outputs. Which of the following does not appear on the inner loop?
A) Land
B) Capital
C) Wages
D) Goods and services sold
Inner Loop
In the context of the circular-flow diagram, it refers to the flow of goods and services from firms to households and the corresponding flow of money from households to firms.
Inputs And Outputs
The resources used in the production process (inputs) and the goods or services produced (outputs) in an economic system.
- Gain insight into the structure and components of the circular-flow diagram.
Verified Answer
AJ
Andrea JacksonJun 20, 2024
Final Answer :
C
Explanation :
The inner loop of the circular-flow diagram represents the flow of goods and services between households and firms, and the flow of factors of production (land, labor, and capital) between firms and households. Wages, which are a form of income received by households in exchange for providing labor, are part of the outer loop, which represents the flow of dollars (income and expenditures).
Learning Objectives
- Gain insight into the structure and components of the circular-flow diagram.