Circular Flow Model

• A model that represents the flow of information in an economy
• A model that represents the flow of resources in an economy
• A model that represents the flow of money in an economy
• A model that represents the flow of goods and services in an economy (correct)

• The flow of money only
• The flow of resources only
• The flow of goods, services, money, and resources (correct)
• The flow of goods and services only

• It helps predict future economic trends
• It helps analyze consumer behavior
• It helps determine government policies
• It helps explain how prices are determined in an economy (correct)

<p>The main components of the circular flow model are households, firms, and the government.</p> Signup and view all the answers

<p>The circular flow model illustrates the flow of goods and services in the economy by showing how households purchase goods and services from firms, and firms produce and sell goods and services to households.</p> Signup and view all the answers

<p>The role of the government in the circular flow model is to collect taxes from households and firms, and to provide public goods and services to the economy.</p> Signup and view all the answers