Which of the following is true of the circular flow model for the private sector?

Question

Quizplus · Accepted Answer

The circular flow model for the private sector shows that total output (or GDP) is equal to the sum of household income, business revenues, and net exports. This means that all the goods and services produced by businesses are paid for by households, businesses themselves, and buyers from abroad. Financial services are not only supplied to consumers but also to businesses, and imports and exports are not controlled solely by the government. Business firms supply factors of production, such as labor and capital, while demanding government services such as infrastructure, education, and public safety.

Which of the Following Is True of the Circular Flow