In the circular flow diagram, what happens when a household pays for a service provided by a firm?

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

Answer: (C)