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.

Question

Quizplus · Accepted Answer

In the circular flow model of the market system, households are at the center and they buy products (i.e. goods and services) from businesses in exchange for money. On the other hand, households sell resources (i.e. factors of production such as labor, land, and capital) to businesses in exchange for income. Therefore, households' major role is to buy products and sell resources, making C the correct choice.

In the Circular ﬂOw Model of the Market System, Households