The inner loop of the circular-flow diagram represents the flow of inputs and outputs. Which of the following does not appear on the inner loop?
A)Land
B)Capital
C)Wages
D)Goods and services sold

Question

Quizplus · Accepted Answer

The inner loop of the circular-flow diagram represents the flow of goods and services between households and firms, and the flow of factors of production (land, labor, and capital) between firms and households. Wages, which are a form of income received by households in exchange for providing labor, are part of the outer loop, which represents the flow of dollars (income and expenditures).

The Inner Loop of the Circular-Flow Diagram Represents the Flow