Which of the Following Best Characterizes the Circular Flow of Income

question 37

Multiple Choice

Which of the following best characterizes the circular flow of income?

• A) Businesses buy resources from the government, and households buy goods and services from businesses.
• B) Businesses buy resources from households, and households use their income from the sale of resources to buy goods and services from businesses.
• C) The government purchases resources from businesses and households and then sells goods and services to businesses and households.
• D) Households buy factors of production from businesses, and businesses buy goods and services from households.

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Definitions:

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