The Simple Circular flOw Model Shows That _____

question 8

Multiple Choice

The simple circular flow model shows that _____.

• A) firms supply inputs to households and households supply output to firms
• B) households supply goods and services to the economy
• C) firms supply output to households and households supply inputs to firms
• D) households supply both output and inputs to the economy

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Definitions:

Consumer Price Index

A metric assessing the weighted mean of costs for a variety of consumer items and services, including food, transportation, and healthcare.

Inflation

The rate at which the general cost of goods and services rises, causing a decrease in the value of money.

Consumer Price Index

A gauge for calculating the weighted average prices of essential consumer goods and services, encompassing medical care, transportation, and food.

Bureau of Labor Statistics

A federal agency that provides a range of statistics including employment, wages, and productivity data, used for economic decision-making and analysis.