Exhibit 1.1

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

Question

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

Quizplus · Accepted Answer

The flow from resource markets (B) to households (C) represents income earned by households for their factor services, such as wages, interest, rent, and profit. Therefore, the best choice is D, income.

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