Question

A circular flow model is shown. Line A is drawn from Household to firms. Line B is drawn from firms to households. Line C is drawn outside from firms to households. Line D is drawn outside from households to firms.
Use the drop-down menus to complete the statements.
In the circular flow model, households provide
to firms. This is represented by the letter A.
In return, within the circular flow model, firms provide households with
. This is represented by the letter B.
Firms then provide
to households. This is represented by the letter C.
Finally, households provide their
to firms. This is represented by the letter D.

Answer 1

A: factors of production (resources — land, labor, capital, entrepreneurship)
B: goods and services
C: income (factor payments — wages, rent, interest, profit)
D: consumer spending (expenditures / money spent on goods and services)