Which line represents the flow of final goods and services?
1 answer:
The Household line represent the flow of final goods and services and consumer spending while the Business line represent the flow of rent, wages, interest, and profits.
<h3>What is the circular flow diagram?</h3>This is an economic diagram that illustrate the flow of money through the economy.
The four parts of the circular flow diagram includes:
- individuals,
- firms,
- market for goods and services,
- market for factors of production.
In conclusion, these economic diagram illustrates the system functions through the interactions of households and firms.
Read more about circular flow diagram
<em>brainly.com/question/26674132</em>
You might be interested in
Answer: A - nominal wages are slow to adjust to changing economic conditions
Explanation:
In the short run, the costs of many of the factors used in the production process are fixed. For example labours wage is fixed for a number of years because of labour contracts. Also the raw materials used in the production process have long term agreements that fix their prices.
As a result of factors of production been fixed in the short run, when general price level rises and the cost of production remains constant, profit also rises.
Firms take advantage of this rise in price and increase production and the quantity of aggregate supply increases. This is why the short run aggregate supply curve is upward sloping.
