Asked by Naomi Allen on Jun 10, 2024
Verified
In the circular flow model of the market system, households' major role is to
A) buy both products and resources.
B) sell both products and resources.
C) buy products and sell resources.
D) sell products and buy resources.
Circular Flow Model
An economic model depicting the continuous, circular flow of goods, services, and money between households and businesses in an economy.
Households
Economic units consisting of all individuals who occupy a home, responsible for making consumption decisions.
Market System
In this model, the economic operations regarding investments, the scale of production, and the distribution strategy are guided by supply and demand laws, ensuring that the pricing of goods and services is freely determined through a system of unrestricted prices.
- Identify the roles of households and businesses within the market system.
Verified Answer
YB
Yanna BarasJun 15, 2024
Final Answer :
C
Explanation :
In the circular flow model, households primarily buy products (goods and services) from firms and sell resources (labor, capital, land, and entrepreneurship) to firms. This reflects the dual role of households as consumers and resource owners in the economy.
Learning Objectives
- Identify the roles of households and businesses within the market system.