The circular flow model shows how ______ interact in markets.
A) workers and firms
B) firms and households
C) firms and banks
D) banks and households
E) households and government

Question

Quizplus · Accepted Answer

The circular flow model illustrates the economic interactions between two main sectors: firms and households. Firms produce goods and services, which they sell to households in exchange for income. Households, in turn, provide labor to firms, receiving wages that they use to purchase goods and services. This model highlights the interdependence between these two groups within the economy.

The Circular Flow Model Shows How ______ Interact in Markets