The simple circular flow model shows that
A)households are on the buying side of both product and resource markets.
B)businesses are on the selling side of both product and resource markets.
C)households are on the selling side of the resource market and on the buying side of the product market.
D)businesses are on the buying side of the product market and on the selling side of the resource market.

Question

Quizplus · Accepted Answer

The simple circular flow model illustrates that households sell labor and other resources in the resource market to businesses, earning income, and then use that income to buy goods and services from businesses in the product market. This makes households the sellers in the resource market and buyers in the product market.

The Simple Circular Flow Model Shows That