A money flow in the circular flow diagram is i.the government's collection of taxes.
Ii)Ford's production of SUVs.
Iii)Nike's payment of wages to its workers.

Question

Quizplus · Accepted Answer

According to the circular flow diagram, money flows in two ways - households to businesses, and businesses to households. Taxes collected by the government do not represent a flow of money in the circular flow diagram as it is not a transaction between households and businesses. On the other hand, Ford's production of SUVs represents a flow of money as it involves households purchasing SUVs from businesses. Similarly, Nike's payment of wages to its workers represents a flow of money as it involves businesses paying households (in this case, workers) for their labor. Therefore, options ii and iii are correct, and the answer is E (ii and iii).

A Money Flow in the Circular Flow Diagram Is I