ECONOMICS (CBSE/UGC NET)

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: -Businesses use the economic resources they buy in the market for resources to produce goods, such as computers and bicycles, and services, such as haircuts and car repairs. Businesses sell these goods and services to households in the market for goods and services.

Detailed explanation-3: -In economics, the product market is the marketplace where final goods or services are sold to businesses and the public sector.

Detailed explanation-4: -In the circular flow of the economy, money is used to purchase goods and services. Goods and services flow through the economy in one direction while money flows in the opposite direction. The circular flow model shows the balance of economic injections and leakages.

Detailed explanation-5: -In the circular-flow diagram, households sell the use of their labor, land, and capital to firms in the markets for the factors of production. The flow of money they receive from doing so is used in the markets for goods and services to purchase the output those firms produce.