Choose the correct sequence

A. Factor payments
B. Goods and services produced and sold in the market
C. Supply of factors of production by the households
D. Spending on goods and services

Choose the correct answer from the options given below:

C, B, A, D

The correct answer is Option (2) → C, B, A, D

C. Supply of factors of production by the household: This is the starting point. Households offer their labor, land, and capital as factors of production.

B. Goods and services produced and sold in the market: Businesses use the factors of production to create goods and services.These are then sold in the market.

A. Factor payments : In return for supplying these factors of production, households receive factor payments. These include wages (for labor), rent (for land), interest (for capital), and profits (for entrepreneurship).

D. Spending on goods and services : Households spend their income (obtained from factor payments) on the goods and services produced by firms. This expenditure by households on goods and services completes the circular flow of income and expenditure.