In the classical version of the circular flow of economic life, all savings by households
A) are deposited in banks.
B) are borrowed by businesses for investment purposes.
C) become part of total demand for goods and services.
D) all of the above

Question

Quizplus · Accepted Answer

In the classical version of the circular flow of economic life, savings by households are typically deposited in banks, which then lend these funds to businesses for investment purposes. This process means that savings indirectly become part of the total demand for goods and services, as businesses use the borrowed funds to invest in capital goods, thereby stimulating economic activity.

In the Classical Version of the Circular Flow of Economic