In the circular flow model, the flow of dollars from firms to households is paid _____, and the flow of dollars from households to firms is paid _____.
A)as wages, capital income, and profits; for goods and services
B)for value added; as imputed values
C)in current dollars; in constant dollars
D)as interest and dividends; for depreciation and taxes

Question

Quizplus · Accepted Answer

In the circular flow model, firms pay households for their labor and resources in the form of wages, capital income, and profits. Households then use this income to purchase goods and services from firms.

In the Circular Flow Model, the Flow of Dollars from Firms