Which of the following is an example of spending on factors of production in the circular flow model?
A)Orson buys a package of beef jerky at a convenience store.
B)Bernadette gets a manicure and pedicure before attending her parents' anniversary party.
C)Landon pays $100 for a season pass to a water park.
D)The "Suds Bucket" car wash buys new squeegees for all its employees.

Question

Quizplus · Accepted Answer

Buying new equipment for employees (squeegees for car wash employees in this case) is an example of spending on factors of production in the circular flow model. Factors of production include inputs such as capital (equipment/machinery), labor, and raw materials that are used to produce goods and services.

Which of the Following Is an Example of Spending on Factors