In A Simple Circular Flow Diagram Firms Use The Money They Get From A Sale To

All goods and services are bought by households. Factors of production flow form households red arrow to firms so they can produce more goods and services.

Module 10 The Circular Flow And Gross Domestic Product

Households spend all of their income.

In a simple circular flow diagram firms use the money they get from a sale to. Expenditures flow through the markets for goods and services while income flows through the markets for the factors of production. The simple circular flow diagram illustrates that 15. Question 9 according to the circular flow diagram gdp c can be computed as the total income paid by firms or as expenditures on final goods and services ccan be computed as the total income paid by firms but not as expenditures on final goods and services c can be computed as expenditures on final goods and services but not as the total income paid.

All of the above are correct. For example when people work for a business they are supplying their labor as a factor of production. In an economy consisting of only households and firms gdp can be computed by 16.

Pay profit to the firms owners. In this transaction money flows from households to firms and this is represented by the direction of the arrows on the lines labeled that are connected to the goods and services markets box. Pay profit to the firms owners.

Pay wages to workers. Pay wages to workers. Goods and services markets.

Pay rent to landlords. In this case money flows from firms to households green arrow in the diagram below in the form of wages in exchange for labour interests for capital and rent for the use of land. Production equals income because 17.

In a simple circular flow diagram firms use the money they get from a sale to a. 10 review questions 1. In a simple circular flow diagram firms use the money they get from a sale to a.

The bottom half of the circular flow diagram which represents resource markets shows that businesses give money to households in exchange for economic resources used as factors of production. In a simple circular flow diagram firms use the money they get from a sale to front pay wages to workers pay rent to landlords pay profit to the firms owners. Pay rent to landlords.

In a simple circular flow diagram firms use the money they get from a sale to question. In a simple circular flow diagram firms use the money they get from a sale to this problem has been solved. Note that money by definition flows from buyer to seller in all markets.

All of the above are correct.

The Circular Flow Of Income