All of the following are examples of spending on factors of production in the circular flow model except
A)Bima hires two students to work at his ice-cream store.
B)"Get Fit Together" purchases 3 new treadmills for its gym.
C)Iris buys a dozen roses for her mother's birthday.
D)The Banyan Tree rents a much larger property so that it can add a restaurant to its facilities.

Question

Quizplus · Accepted Answer

Buying a dozen roses for a personal occasion is not an example of spending on factors of production in the circular flow model. Factors of production include land, labor, capital, and entrepreneurship, which are used to produce goods and services for the market. Hiring workers, purchasing capital goods, and renting property are examples of spending on factors of production.

All of the Following Are Examples of Spending on Factors