ECONOMICS
BUSINESS CYCLES
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Households provide the demand for the factor market, and business provide the supply for goods and services market.
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Households provide the demand for the goods and service market, and business provides the supply for the factor market.
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Households provide the supply for the factor market, and business provides the supply for the goods and service market.
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Households provide both the supply and demand for the goods and services market.
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Detailed explanation-1: -In economics, the circular flow model demonstrates how resources, money, credit, goods, and services move through the economy.
Detailed explanation-2: -The correct answer is C. Goods and services (products) flow from businesses to the goods and services market.
Detailed explanation-3: -Households are sellers in the market for resources. Households sell land, labor, capital, and entrepreneurial activity in exchange for money, which in this case is called income. Households are buyers in the market for goods and services. Households exchange income for goods and services.
Detailed explanation-4: -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.