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Which of the following best explains why the circular flow mode…

  • Question 10b of 25 - Circular flow model

  • Maximum Attempts: 1
  • Question Type: Multiple Choice
  • Maximum Score: 2
  • Question: Which of the following best explains why the circular flow model characterizes the free-market system?
  • Answers:
  1. Producers recycle products discarded by producers.
  2. Production decisions follow the cycles of nature.
  3. Consumers and producers influence each other in a circular fashion.
  4. Profits flow in a circular way back and forth between different producers.

The correct answer is: Consumers and producers influence each other in a circular fashion. In a free-market system, consumers and producers influence each other.

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