Judging from the circular flow diagram, what happens to dollars that households earn as wages?
a. They are given to other households in the form of tax distributions.
b. They are given to firms in exchange for capital and labor.
c. They are recycled back to firms when households buy products and services.
d. They are removed from the simple circular flow diagram, making the circle smaller.
c. They are recycled back to firms when households buy products and services.
Economics
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