The circular flow is used to make the point that

Question

Quizplus · Accepted Answer

The circular flow model describes the flow of goods, services, and resources between households and businesses. It emphasizes the fact that production generates income, which is then spent by households on goods and services, and the cycle repeats. This flow of income is what drives economic activity and growth. Option A and B are incorrect as they are not related to the circular flow model, and D is only partially correct as households purchase goods and services from firms, not factors of production.

The Circular Flow Is Used to Make the Point That