Question

which of the following best characterizes the circular flow of income?businesses buy resources from the government, and households buy goods and services from businesses.businesses buy resources from households, and households use their income from the sale of resources to buy goods and services from businesses.the government purchases resources from businesses and households and then sells goods and services to businesses and households.households buy factors of production from businesses, and businesses buy goods and services from households.

Answer 1

The circular flow of income is characterized by businesses buying resources from households, which then use that income to buy goods and services from businesses, as depicted by the circular flow model.

Step-by-step explanation:

Which of the following best characterizes the circular flow of income? The answer is that businesses buy resources from households, and households use their income from the sale of resources to buy goods and services from businesses. The circular flow model illustrates this through an outer circle representing the product market, where households demand and firms supply, and an inner circle representing the labor market, where households supply labor to firms in return for incomes such as wages, salaries, and benefits.