Question

What effect do consumer-protection regulations have on the circular flow of the free-market system?

A. They divert resources to government planners, which cuts down on economic activity

B. They inspire consumer confidence, which leads to increased purchases from producers

C. They increase costs for producers, which slows the flow of investment

D. They lead to increased prices and higher taxes, which reduces the flow to almost nothing​

Edit: It's B

Answer 1

I believe the correct answer is that they inspire consumer confidence which leads to increased purchases from producers.