A circular flow model describes the movement of goods and services.

- Households
- Goods and services
- Factors of production
- Imports
- Foreign sector
- Exports
- Firms

How does globalization cause the foreign sector to influence the economy?

A. The foreign sector influences how services move between firms and households.
B. The foreign sector influences how imports and exports move between firms and households.
C. The foreign sector influences how factors of production move between firms and households.
D. The foreign sector influences how goods move between firms and households.

The foreign sector influences how imports and exports move between firms and households. This means that the global exchange of goods and services plays a significant role in impacting the economy through international trade.

Financial flows between countries also affect the economy, as seen in the circular flow models. Financial intermediaries facilitate the movement of financial assets across borders, influencing economic stability.

Exports and imports are crucial components of the foreign sector's influence on the economy, showcasing how international trade directly impacts the flow of goods between countries, affecting economic conditions.

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