ECONOMICS
MONEY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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how profits are made
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what inputs are required for what outputs
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how many firms can support the needs of how many households
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the interactions between households and firms in the free market
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Detailed explanation-1: -The circular flow model demonstrates how money moves from producers to households and back again in an endless loop. In an economy, money moves from producers to workers as wages and then back from workers to producers as workers spend money on products and services.
Detailed explanation-2: -The circular flow model shows the interaction between two groups of economic decision-makers-households and businesses-and two types of economic markets-the market for resources and the market for goods and services.
Detailed explanation-3: -Circular Flow of Income in a Two-Sector Economy It is defined as the flow of payments and receipts for goods, services, and factor services between the households and the firm sectors of the economy.
Detailed explanation-4: -Circular flow Diagram is a visual model of the economy that shows how dollars flows through markets among households and firms.