According to the circular ﬂow model of the market system, when resource-owners' money income is
rising, then the costs to business ﬁrms that employ their resources must be falling.

Question

Quizplus · Accepted Answer

According to the circular flow model, when resource-owners' money income is rising, it means they are receiving more payments for their resources, which increases the costs to business firms that employ their resources. So, if resource-owners' money income is rising, the costs to business firms that employ their resources must be increasing, not falling.

According to the Circular ﬂOw Model of the Market System