GK
BUSINESS ECONOMICS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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What do consumers, producers, and the owners of resources do with money payments to create a flow of resources, goods, services, and money payments?
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Exchange
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Distribute
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Produce
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Consume
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Explanation:
Detailed explanation-1: -In the circular flow of the economy, money is used to purchase goods and services. Goods and services flow through the economy in one direction while money flows in the opposite direction. The factors of production include land, labor, capital and entrepreneurship.
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.
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