Which of the Following Statements Illustrates That the Idea of Comparative

Multiple Choice

Which of the following statements illustrates that the idea of comparative advantage is embedded in the circular flow diagram?

A) Households spend money on durable and non durable goods.
B) Households are composed of individuals.
C) The total dollar value of expenditures should equal the dollar value of incomes.
D) Wages and salaries represent a major percentage of the firms' expenditures.
E) Firms use the labour they hire to produce goods and services,which they sell to households.