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Economics (AS & A Level) · May / June 2023 · Paper 12 · Question 21

9708Introduction to the circular flow of income

The diagram shows a basic two-sector circular flow of income. [diagram: factor market, firms, households, product market] What can be concluded about the direction of flows?

  1. AConsumer expenditure flows anticlockwise.
  2. BGoods and services flow clockwise.
  3. CIncomes flow anticlockwise.
  4. DResources flow anticlockwise.

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Correct answer: D. Resources flow anticlockwise.

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