In the circular ﬂow diagram, ﬁrms get their ability to pay for the costs of production from the
A) revenues they receive for their products.
B) resources they acquire in the resource markets.
C) incomes they earn for their resources.
D) goods and services they get in the product markets.

Question

Quizplus · Accepted Answer

Firms receive their ability to pay for the costs of production from the revenues they receive for their products in the product markets. This revenue comes from households who purchase the goods and services produced by the firms.

In the Circular ﬂOw Diagram, ﬁRms Get Their Ability to Pay