which statement best illustrates the relationship between three different elements of the circular flow of products

C. Businesses create goods for product markets, which sell them directly to households.

Explanation:

Circular flow model is an economic model that is used by economists to show or demonstrate how money, goods and services move from one economic agent to another such as producer, workers, wholesaler, retailer and consumers (households).

Basically, the three (3) elements of the circular flow model of products are;

I. Business firms (producers).

II. Product market (wholesalers and retailers).

III. Households (consumers).

According to the circular flow model of products, businesses play a role in the circular flow of products (goods) by creating goods that households or consumers want to buy. These goods are produced to meet the needs or wants of customers (households) and as such making them willing to buy it.

This ultimately implies that, the cardinal point or reason for which businesses engage in the manufacturing of goods and services is to supply the product markets, which sells them to consumers in order to meet their demands.

In conclusion, the statement which best illustrates the relationship between the three (3) different elements of the circular flow of products is that, businesses create goods for product markets, which sell them directly to households.

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