In the circular-flow diagram,which of the following items flows from firms to households through the markets for the factors of production?
A)goods and services
B)land,labor,and capital
C)dollars spent on goods and services
D)wages,rent,and profit

Question

Quizplus · Accepted Answer

Wages, rent, and profit are payments made by firms to households for the use of factors of production such as labor, land, and capital. These payments flow from firms to households through the markets for factors of production. Goods and services (A) flow from firms to households through the product markets, while land, labor, and capital (B) are supplied by households to firms through the markets for factors of production. Dollars spent on goods and services (C) do not flow from firms to households but rather from households to firms through the product markets.

In the Circular-Flow Diagram,which of the Following Items Flows from Firms