Suppose we insert $1 in the circular flow economy. If the $1 moves around in the same direction, which answer represents a possible sequence of items purchased or rented?
A) land, labor, capital, entrepreneurship
B) land, services, labor, capital
C) goods, labor, services, capital
D) goods, labor, capital, services
E) labor, capital, labor, rent

Question

Quizplus · Accepted Answer

C) goods, labor, services, capital is a possible sequence because it reflects the flow of economic activity where goods are produced, labor is employed to produce goods or provide services, services are consumed, and capital is invested in producing goods or services.

Suppose We Insert $1 in the Circular Flow Economy