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Choose the Statement That Defenders of the Circular Flow Model

Question 6

Multiple Choice

Choose the statement that defenders of the circular flow model, which explains the nature of economic transactions in terms of a flow of resources from businesses to households, would agree with.


A) The services that resources yield can be provided in many ways by substituting different factors of production and are, therefore, infinite.
B) The possibility that the economy can grow indefinitely to keep up with significant population growth is ignored by this model.
C) If resources are moved through the classical model of a productive system at a rate that outpaces the productive capacity of the earth or the earth's capacity to absorb wastes and by-products of the system, the entire classical model will prove unstable.
D) Many resources like clean air, drinkable water, fertile soil, and food, under the circular flow model, cannot be replaced by the remaining factors of production.

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