Figure 2-2
-Refer to Figure 2-2.If the outer loop of this circular-flow diagram represents flows of dollars,then the inner loop includes
A)flows of goods and services from households to firms.
B)flows of inputs from households to firms.
C)flows of rent payments paid to owners of land.
D)flows of wages and salaries paid to workers.

Question

Figure 2-2 
-Refer to Figure 2-2.If the outer loop of this circular-flow diagram represents flows of dollars,then the inner loop includes
A)flows of goods and services from households to firms. 
B)flows of inputs from households to firms. 
C)flows of rent payments paid to owners of land. 
D)flows of wages and salaries paid to workers.

Quizplus · Accepted Answer

The inner loop of the circular-flow diagram represents the flow of inputs (factors of production) from households to firms, which includes labor, land, and capital.

Figure 2-2 -Refer to Figure 2-2.If the Outer Loop of This Circular-Flow