Exhibit 1.2

-Refer to the circular-flow model in Exhibit 1.2. Firms supply ________ to households through product markets.
A) goods and services
B) products
C) labor, capital, natural resources, and entrepreneurial ability
D) resources
E) wages, interest, rent, and profit

Question

Exhibit 1.2
 
-Refer to the circular-flow model in Exhibit 1.2. Firms supply ________ to households through product markets.
A) goods and services 
B) products 
C) labor, capital, natural resources, and entrepreneurial ability 
D) resources 
E) wages, interest, rent, and profit

Quizplus · Accepted Answer

Firms supply goods and services to households through product markets in the circular-flow model depicted in Exhibit 1.2. Option B does not encompass all the types of resources that firms supply, and option D is too broad. Option E refers to the income that households receive, not the goods and services that firms provide. Thus, the best answer is option A.

Exhibit 1.2 -Refer to the Circular-Flow Model in Exhibit 1.2. Firms Supply