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)Wages, rent, and profit
D)Dollars spent on goods and services

Question

Quizplus · Accepted Answer

In the circular-flow diagram, firms pay households for the use of factors of production (land, labor, and capital) through wages, rent, and profit. This is how income flows from firms to households in the markets for the factors of production.

In the Circular-Flow Diagram, Which of the Following Items Flows