In the circular-flow diagram,
A)firms own the factors of production.
B)the factors of production are labor,land,and capital.
C)the factors of production are also called "output."
D)All of the above are correct.

Question

Quizplus · Accepted Answer

The circular-flow diagram shows the flow of goods, services, and money between households and firms. The factors of production, which are labor, land, and capital, are owned by households and provided to firms. Output refers to the goods and services produced by the firms using the factors of production. Therefore, option A and C are incorrect.

In the Circular-Flow Diagram