According to the circular flow diagram, the government purchases products from a. firms b. households c. foreign governments d. government agencies

The correct answer is letter B.

The circular flow of income, or wealth, is a model that explains the interaction between the agents of an economy in aggregate, through macroeconomics.

This model is represented by taking into consideration two main agents, participants of the economy, which are the companies and the families that integrate it. Moreover, starting from simplification, the model also considers government as an agent.

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