GK
BUSINESS ECONOMICS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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How do individuals contribute to the circular flow of economic activity?
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Businesses buy goods and services from individuals
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Businesses purchase productive resources in product markets
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Individuals provide labor for factor markets and buy goods in product markets
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Individuals buy productive resources from factor markets and provide labor for product markets
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Explanation:
Detailed explanation-1: -How do individuals contribute to the circular flow of economic activity? Individuals provide labor for factor markets and buy goods in product markets.
Detailed explanation-2: -In a two-sector model, circular flow models start with the household sector that engages in consumption spending (C). Households contribute to an economy by working (giving away time and labor) and by buying products (giving away money). In return, households consume products and utilize government programs.
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