ECONOMICS
BUSINESS CYCLES
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Firms are suppliers in both the product and factor markets.
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Firms are demanders in the resource markets and suppliers in the product markets.
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Households are demanders in both the resource and factor markets.
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Households are demanders in the resource markets & suppliers in the product markets.
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The private sector is made up of the households, firms, and the government.
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Detailed explanation-1: -The correct option is C. households sell resources to business firms. In the circular flow model consisting of households and businesses only two markets exist.
Detailed explanation-2: -10. Which of the following is true according to the circular flow model? factor markets. Explanation: In the circular flow model, households demand goods and services in the product market and supply the factors of production (land, labor, capital, and entrepreneurship) in the factor market.
Detailed explanation-3: -The circular flow model shows the interaction between two groups of economic decision-makers-households and businesses-and two types of economic markets-the market for resources and the market for goods and services.
Detailed explanation-4: -Answer and Explanation: A characteristic of the circular flow model is c. households are sellers in the resource market.
Detailed explanation-5: -Answer and Explanation: False, factors of production are owned by households, not firms. According to the circular flow model, the two markets are households and firms.