AP Macroeconomics Question 233: Answer and Explanation
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12. In the circular-flow diagram households send to firms in return for
- A. resources; spending
- B. spending; resources
- C. resources; wages and profits
- D. goods and services; wages
- E. goods and services; spending
Correct Answer: C
(C) Households own the resources (land, labor, capital) in the economy. They sell them to firms in exchange for wages and profits.