In the circular-flow diagram, the two types of markets in which households and firms interact are the markets for goods and services and the markets for factors of production.

Question

Quizplus · Accepted Answer

In the circular-flow diagram, households provide factors of production (such as labor, land, and capital) to firms in exchange for income in the markets for factors of production, and they use that income to buy goods and services from firms in the markets for goods and services.

In the Circular-Flow Diagram, the Two Types of Markets in Which