Exhibit 1.1

-Refer to the circular-flow model in Exhibit 1.1. If box D represents firms, then box C represents:
A) firms.
B) resource markets.
C) households.
D) product markets.
E) expenditures.

Question

Exhibit 1.1
 
-Refer to the circular-flow model in Exhibit 1.1. If box D represents firms, then box C represents:
A) firms. 
B) resource markets. 
C) households. 
D) product markets. 
E) expenditures.

Quizplus · Accepted Answer

In the circular-flow model, box C represents households, which are the primary consumers of goods and services produced by firms in box D. Box D represents firms, which produce goods and services to sell in product markets (not resource markets), where they are purchased by households and in some cases, by government and foreign entities.

Exhibit 1.1 -Refer to the Circular-Flow Model in Exhibit 1.1. If Box