Question

The circular flow model of a mixed economy shows

A)only how firms and households interact.
B)the physical flow and monetary flow between households and firms in both the product and factor markets.
C) how government interacts with households and firms in the product and factor markets.
D)how taxes and profits are related.

Answer 1

The flows of factors of production that go from households through factor markets to firms and of the goods and services that go from firms through goods markets to households.

Answer 2

I feel like this is from Economics haha. The answer that you're looking for is B.) A circular flow model of a Market Economy shows the physical flow and the monetary flow between households and firms in both the product and factor markets. In a product market, monetary flow is going to the firms and the physical flow is going to the households. In a factor market the monetary flow is going to the households and the physical flow is going towards the firms.

Hope this helps! (: