The flows of money compared to the flow of resources, goods, and services in the circular flow model
A) occur only once, then they become stocks (as opposed to flows)
B) are equivalent when the number of households equals the number of firms
C) move in the same direction as long as payments equal revenue
D) always lag behind the flow of resources, goods, and services
E) move in the opposite direction

Question

Quizplus · Accepted Answer

In the circular flow model, the flows of money and the flows of resources, goods, and services move in opposite directions. Money flows from firms to households as wages, rent, interest, and profits, and from households to firms in exchange for goods and services.

The Flows of Money Compared to the Flow of Resources