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12.The flows of the services of the factors of production are​ _______. A. money flows from...

12.The flows of the services of the factors of production are​ _______.

A. money flows from households through factor markets to firms B. real flows from households through factor markets to firms C. money flows from firms through factor markets to households D. real flows from firms through factor markets to households

The incomes earned by the factors of production are​ _______.
A. money flows from firms through factor markets to households B. money flows from households through factor markets to firms C. real flows from firms through factor markets to households D. real flows from households through factor markets to firms

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12)

The correct answer is (B) real flows from households through factor markets to firms

In a Circular circular flow of goods and services, Household provides factors of production like land labor, etc to the firms and as this is is a real transfer(i.e. transfer in terms of goods and services). Hence, The flows of the services of the factors of production are a real flows from households through factor markets to firms     

The correct answer is (A) money flows from firms through factor markets to households

As discussed above households provides factors of production and hence in return firms pay for the services provided by the households to them and hence there is a money flow from firms through factor markets to households.

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