The following diagram presents a circular-flow model of a simple economy. The outer set of arrows (shown in green) shows the flow of dollars, and the inner set of arrows (shown in red) shows the corresponding flow of inputs and outputs.

Which of the following is true regarding this economic model? 0 While simple, the circularflow diagram can still be useful for die purposes of modeling how dollars and resources move d1roughout an EOOI'IOFI'IY. 0 Because, in reality, the economy is very large, the simplicity of the circularflow diagram makes it useless for the purposes of modeling how dollars and resources move throughout an economy. 0 Because it does not take into account the role of government, the circularow diagram is useless for the purposes of modeling how dollars and resources move throughout an economy. 0 Because it does not take into account international trade, the circularow diagram is useless for the purposes of modeling how dollars and resources move throughout an economy