AP Macroeconomics Question 233: Answer and Explanation

Test Information

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Question: 233

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

Explanation:

(C) Households own the resources (land, labor, capital) in the economy. They sell them to firms in exchange for wages and profits.