The four key markets that coordinate the circular flow of income are
A) goods and services, resources, loanable funds, and foreign exchange.
B) consumption, investment, stock, and government.
C) government, household goods, bond, and business.
D) financial, corporate, stock, and loanable funds.

Question

Quizplus · Accepted Answer

The four key markets that coordinate the circular flow of income are as follows:

1) Goods and services market: This is where households purchase goods and services produced by businesses in exchange for payment.

2) Resource market: This is where businesses purchase resources such as labor, land, and capital from households in exchange for payment.

3) Loanable funds market: This is where households make savings available for borrowing by businesses and the government in exchange for payment.

4) Foreign exchange market: This is where businesses and governments exchange currency for international trade and investment purposes.

The Four Key Markets That Coordinate the Circular Flow of Income