Exhibit 1.1

-Refer to the circular-flow model in Exhibit 1.1. If C represents households and A represents product markets, then the flow from C to A is:
A) revenue.
B) expenditures.
C) products.
D) income.
E) resources.

Question

Exhibit 1.1
 
-Refer to the circular-flow model in Exhibit 1.1. If C represents households and A represents product markets, then the flow from C to A is:
A) revenue. 
B) expenditures. 
C) products. 
D) income. 
E) resources.

Quizplus · Accepted Answer

The flow from households (C) to product markets (A) represents the expenditures made by households on goods and services produced by firms. Therefore, the best choice is B) expenditures.

Exhibit 1.1 -Refer to the Circular-Flow Model in Exhibit 1.1. If C