if-a-household-purchases-a-new-car-how-is-this-transaction-represented-in-the-ci

Question

If a household purchases a new car, how is this transaction represented in the circular flow diagram?

Accepted Answer

The household spends money in the market for goods and services, and the firm receives revenue.

Answer

The firm provides factors of production to the household.

Answer

The household receives income from the firm.

Answer

The household provides labor to the firm.