Question

Suppose that a city government decides to develop a public park. In the circular flow diagram with government, which of the following is a way that the government might engage directly with firms?(1 point)

The government might provide revenue from the park to firms.

The government might provide firms with the tools and equipment needed to develop the park.

The government might tax firms to fund the development of the park.

The government might provide expenditures to firms in exchange for their work on the park.

Answer 1

The government might provide expenditures to firms in exchange for their work on the park.

Explanation: This is a government purchase of goods and services (e.g., contracting construction companies), a direct flow from government to firms in the circular‑flow model.