Which of the following best characterizes the circular flow of income?
A. Businesses buy resources from the government, and households buy goods and services from businesses.
B. Businesses buy resources from households, and households use their income from the sale of resources to buy goods and services from businesses.
C. The government purchases resources from businesses and households and then sells goods and services to businesses and households.
D. Households buy factors of production from businesses, and businesses buy goods and services from households.
Answer:B
Which of the following best characterizes the circular flow of income?
A. Businesses buy resources from the government, and households buy goods and services from businesses. B. Businesses buy resources from households, and households use their income from the sale of resources to buy goods and services from businesses. C. The government purchases resources from businesses and households and then sells goods and services to businesses and households. D. Households buy factors of production from businesses, and businesses buy goods and services from households.
Explanation: 30. In the circular flow diagram model: