In the Circular-Flow Diagram,which of the Following Items Flows from Households

question 22

Multiple Choice

In the circular-flow diagram,which of the following items flows from households to firms through the markets for goods and services?

• A)goods and services
• B)dollars paid to land,labor,and capital
• C)dollars spent on goods and services
• D)wages,rent,and profit

---

Definitions:

Public Good

A service or product offered to every member of a society for free, by either a governmental entity or a private organization or person, with no intention of making a profit.

Tennessee Valley Authority

A U.S. government corporation established in 1933 to address issues related to flooding, electricity generation, and economic development in the Tennessee Valley region.

Consumption

The use of goods and services by households, constituting a primary component of GDP.

Price Mechanism

The system in which the forces of supply and demand determine the prices of goods and services in a market economy.