Which of the following best illustrates the circular flow model in action?
A)Bobbie goes to work and builds cars; she uses the income she receives to buy food at the grocery store.
B)Evan buys a new couch; the owner of the furniture store uses some of the money from the sale to pay her supplier and uses the rest to take her family out to dinner.
C)Boeing experiences a surge in orders for new airplanes, prompting the company to hire more workers.
D)All of these answers illustrate the workings of the circular flow model.

Question

Quizplus · Accepted Answer

The circular flow model in economics describes how money moves through an economy, from producers to workers as wages and then back to producers as consumers spend their income. All the given options (A, B, and C) showcase this movement of money, illustrating the circular flow of economic activity.

Which of the Following Best Illustrates the Circular Flow Model