Which of the Following Is Illustrated by the Circular Flow

question 94

Multiple Choice

Which of the following is illustrated by the circular flow of income?

• A)the interaction of households and firms through the factors and goods markets
• B)that there is no relationship between goods markets and factor markets
• C)the flows of expenditures and income in a household
• D)that the flow of payments moves in the same direction as the flow of goods
• E)that firms own the factors of production

---

Definitions:

Hypothesis

Testable statement about two or more variables and the relationship between them.

Scientific Method

A systematic approach to research where a problem is identified, relevant data are gathered, a hypothesis is formulated from the data, and the hypothesis is empirically tested.

Generate a Hypothesis

The process of formulating a testable statement or prediction based on observations and theoretical insights.

Draw Conclusions

The process of analyzing the results of a study or data to form a judgment or insight about the hypothesis or research question.