Which One of the Following Is an Example of a Circular

Multiple Choice

Which one of the following is an example of a circular flow model and shows the interdependence of households and firms?

A) Households demand their resources from firms in the factor markets and, in turn, supply in the product market, the goods and services produced by the firms.
B) Firms go to the resource market to supply resources that households demand and, in turn, provide households with the goods and services produced for the product markets.
C) Households supply their resources to firms in the factor markets and, in turn, demand in the product market, the goods and services produced by the firms.
D) Firms in the factor markets pay households, in the form of wages, interest, rent and profit, for resources demanded.