The circular flow without taxation, government spending and international trade, shows how real resources and financial payments flow between _______ and __________.
A) government, firms
B) government, households
C) firms, government
D) firms, households

Question

Quizplus · Accepted Answer

In a simple circular flow model without government and international trade, real resources and financial payments flow between firms and households. Households provide factors of production to firms and receive wages, rent, and profits in return, while firms produce goods and services that households purchase.

The Circular Flow Without Taxation, Government Spending and International Trade