Which One of the Following Is an Example of a Circular

question 117

Multiple Choice

Which one of the following is an example of a circular flow model and shows the interdependence of households and firms?

• A)Households demand their resources from firms in the factor markets and, in turn, supply in the product market, the goods and services produced by the firms.
• B)Firms go to the resource market to supply resources that households demand and, in turn, provide households with the goods and services produced for the product markets.
• C)Households supply their resources to firms in the factor markets and, in turn, demand in the product market, the goods and services produced by the firms.
• D)Firms in the factor markets pay households, in the form of wages, interest, rent and profit, for resources demanded.
• E)The circuit is completed when payments flow from households, through the product markets, to firms for the goods and services they demand.

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Definitions:

Accident

An unforeseen and unplanned event or circumstance, often resulting in damage or injury.

Tender Offer

A corporate finance term referring to an open offer to purchase some or all of shareholders' shares in a corporation at a specific price for a specified time.

Negative Information

Unfavorable data or facts, particularly about a person's credit history or financial status, that can affect their ability to secure loans or credit.

New Corporation

A business entity that has recently been registered and commenced operations, typically characterized by its fresh market entry.