Which statement best describes the circular flow model?

Question

The model represents the movement of money and resources throughout the economy.
The model represents the interactions within sectors.
The model represents the flow of goods and services abroad.
The model represents the changing relationships between actors.

Answer 1

The statement that best describes the circular flow model is:

The model represents the movement of money and resources throughout the economy.

The circular flow model illustrates how goods and services, as well as money, circulate among households, businesses, and the government in an economy.