In the fictional town of Wilsonville, there's a bustling local economy with numerous firms and households. The

local bakery, owned by Mrs$.$ Smith, is a favorite among the townspeople for its delicious pies. Mrs$.$ Smith

buys her fresh apples from the local orchard, which is owned by Mr$.$ Johnson. Meanwhile, Mr$.$ Johnson and

his family are regular customers at Mrs$.$ Smith's bakery, indulging in her pies every weekend. Use the

diagram below to answer the question.

What do arrows a and b represents?

a$)$ a $-$ income$$ b $-$ goods and services

b$)$ a $-$ spending$$ b $-$ factors of production

c$)$ a $-$ spending$$ b $-$ goods and services

d$)$ a $-$ income$$ b $-$ factors of production