Which of the Following Best Characterizes the Circular Flow of Income

question 133

Multiple Choice

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

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

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Definitions:

Hem/o

A prefix used in medical terminology that refers to blood.

Hepat/o

A prefix relating to the liver.

Neur/o

A prefix in medical terminology referring to nerves or the nervous system.

Pneum/o

A combining form representing the lungs or air, used in medical terminology.