Homework Help: Economics

Posted by John on Tuesday, June 5, 2007 at 9:59am.

The circular flow of economic activity can be summed up as:

A. households earn money by selling their factors of production to firms in the factor market and use that money to buy goods and services from firms in the product market.
B. firms earn money by selling their factors of production to households in the factor market and use that money to buy goods and services from households in the product market.
C. households buy factors of production from firms and use them to produce goods and services, which they sell to other households.
D. households earn money by selling their factors of production to firms in the product market and use that money to buy goods and services from firms in the factor market.
E. firms buy goods and services from other firms, who in turn buy goods and services from yet other firms.

Go with A

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