If a household purchases a car from a firm, what is the flow of money and goods in the circular flow diagram?

• A. Money and goods both flow from the household to the firm.
• B. Money and goods both flow from the firm to the household.
• C. Money flows from the household to the firm; goods flow from the firm to the household.
• D. Money flows from the firm to the household; goods flow from the household to the firm.

Answer: (C)