Question

The circular flow model examines interactions between which sectors of the economy? Check all that apply.

Answer 1

Business, Government, and Household sector is the answer

Answer 2

Answer: Business, Government and Household sector

Explanation: A circular flow diagram shows the flow of goods and services between the firms, households and the government. Role of each sector,

Business- Supply goods and service to the households and government sector in return for revenue and make factor payments to the households.

Household-  They supply factors of production to the government and the business sector in return for factor payments and purchase goods and services from them.

Government- This sector produces goods and services, taxes the households and business sector and also provides transfer payments or subsidies to them.