Exhibit 1.1

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

Quizplus · Accepted Answer

According to the circular-flow model, box C represents households, which are the ultimate consumers. Therefore, box D, which is connected to box C through the flow of money, represents firms, which produce goods and services for households to purchase.

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