Exhibit 1.1

-Refer to the circular-flow model in Exhibit 1.1. If D represents firms and B represents resource markets, then the flow from D to B is:
A) revenue.
B) expenditures.
C) labor, capital, and natural resources.
D) income and expenditures.
E) wages, interest, rent, and profit.

Question

Exhibit 1.1
 
-Refer to the circular-flow model in Exhibit 1.1. If D represents firms and B represents resource markets, then the flow from D to B is:
A) revenue. 
B) expenditures. 
C) labor, capital, and natural resources. 
D) income and expenditures. 
E) wages, interest, rent, and profit.

Quizplus · Accepted Answer

The flow from firms (D) to resource markets (B) represents the payment for the inputs or resources used by firms in production. These payments are in the form of wages (for labor), interest (for capital), rent (for land), and profit (for entrepreneurship).

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