The circular flow diagram shows that the flow of payments to the factors used to produce goods and services exceeds the flow of payments for final goods and services.

Question

Quizplus · Accepted Answer

The circular flow diagram illustrates that the flow of payments for the factors used to produce goods and services (like wages, rent, interest, and profits) is equal to the flow of payments for final goods and services, maintaining a balance in the economy.

The Circular Flow Diagram Shows That the Flow of Payments