Question

Which of the following statements regarding the circular flow model is not accurate?

a. Firms supply households with goods and services.
c. Firms pay households for land, labor, and capital.
b. Households pay firms for goods and services.
d. Households supply firms with goods and services.

Answer 1

The right answer for the question that is being asked and shown above is that: "d. Households supply firms with goods and services." Among the following statements regarding the circular flow model that is not accurate is that households supply firms with goods and services.

Answer 2

d. Households supply firms with goods and services.

Step-by-step explanation:

The circular flow model of income explains how money circulates among economic agents. Firms pay families wages and rent for land and capital. Families buy the goods and services produced from firms. Thus money circulates between business and citizens. What makes no sense is that families provide firms with goods and services. This is the opposite.