Figure 2.22 Alt text for Figure 2.22: In figure 2.22, a circular flow diagram.
Long description for Figure 2.22: 4 circles arranged in a circle, labelled as follows, clockwise from the top center: Households, Factor Markets, Firms, and Product Markets.All these circles are connected by arrows J, G K and M, as follows: Arrow M: Households to Factor Markets Arrow J: Factor Markets to Households Arrow M: Factor Markets to Firms Arrow J: Firms to Factor Markets Arrow K: Firms to Product Markets Arrow G: Product Markets to Firms Arrow K: Product Markets to Households Arrow G: Households to Product Markets
-Refer to Figure 2.22.Which two arrows in the diagram depict the following transaction? Stanley purchases the novel Night of Sorrows for his summer reading pleasure.

Question

Figure 2.22  Alt text for Figure 2.22: In figure 2.22, a circular flow diagram.
Long description for Figure 2.22: 4 circles arranged in a circle, labelled as follows, clockwise from the top center: Households, Factor Markets, Firms, and Product Markets.All these circles are connected by arrows J, G K and M, as follows: Arrow M: Households to Factor Markets Arrow J: Factor Markets to Households Arrow M: Factor Markets to Firms Arrow J: Firms to Factor Markets Arrow K: Firms to Product Markets Arrow G: Product Markets to Firms Arrow K: Product Markets to Households Arrow G: Households to Product Markets
-Refer to Figure 2.22.Which two arrows in the diagram depict the following transaction? Stanley purchases the novel Night of Sorrows for his summer reading pleasure.

Quizplus · Accepted Answer

The purchase transaction involves Stanley (Households) buying the novel Night of Sorrows (Product) from the Product Markets. Hence, the arrows involved in this transaction would be K (Firms to Product Markets) and G (Product Markets to Households), which are depicted in option D.

Figure 222 Alt Text for Figure 2