ECONOMICS
ECONOMIC SYSTEMS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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firms buy goods and services from households
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firms sell goods and services to households
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firms sell resources to households
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firms buy resources from households
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Detailed explanation-1: -Businesses (firms) in the Product Market are producers of goods and services in the circular flow model. They sell goods and services to households. They earn revenue in exchange for their goods and services.
Detailed explanation-2: -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. Businesses are sellers in the market for goods and services.
Detailed explanation-3: -When households need a good or service, their money flows to the product market in a process called consumer spending. To provide goods and services to households, the product market purchases them from businesses, generating revenue.
Detailed explanation-4: -Product market: The market in which households purchase the goods and services that firms produce.