The Circular Flow Model Shows the Flow Of

question 21

Multiple Choice

The circular flow model shows the flow of:

• A)products from households to businesses and the flow of resources from businesses to households.
• B)products from households to businesses and the flow of productive resources from households to businesses.
• C)products from businesses to households and the flow of money from households to businesses.
• D)products from businesses to households and the flow of productive resources from households to businesses.

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Definitions:

Production Possibilities

The various combinations of goods and services that can be produced using all available resources and technology.

Opportunity Cost

The cost of foregoing the next best alternative when making a decision, representing the benefits one misses out on when choosing one option over another.

Constant Rate

A fixed value of change in a quantity with respect to another quantity, often used in mathematics and economics to describe steady growth or decline.

Opportunity Cost

Missing potential benefits that could have been gained from unchosen options when deciding on one.