Question

With reference to the circular flow of goods and services, complete the following sentence: Suppose that Reneilwe runs a construction company, where she uses capital and labour. After completing projects, the payment for services will remunerate ________ to ________in the ________market.

a. wages; labour; goods
b. wages; capital; factor
c. interest; capital; factor
d. wages; entrepreneurship; factor

Answer 1

The payment Reneilwe's construction company makes after completing projects is in the form of wages to labor in the factor market, according to the circular flow of goods and services model.

Step-by-step explanation:

Within the context of the circular flow of goods and services, when a construction company such as the one Reneilwe runs completes projects, the payment for services rendered will remunerate different factors in the factor market. Specifically, the payment will go towards wages for labor, interest for capital, rent for land, and profits for entrepreneurship.

However, based on the options provided, the most fitting completion for the sentence would be: 'Suppose that Reneilwe runs a construction company, where she uses capital and labor. After completing projects, the payment for services will remunerate wages to labor in the factor market.'