GENERAL KNOWLEDGE

Detailed explanation-1: -They are: Rent, wages, interest, and profit.

Detailed explanation-2: -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-3: -In exchange for their resources, households earn income. Each resource has its own income category. Households receive wages for their labor, rent for use of their land, interest for use of their capital, and profit for their entrepreneurial ability.

Detailed explanation-4: -In a circular flow diagram, labor and other factors of production are sold in resource markets. These resources are then used to produce goods and services sold in product markets.

Detailed explanation-5: -Understanding the Circular Flow Model One is goods and services flowing from businesses to individuals, and individuals provide resources for production (labor force) back to the businesses.