Consider the circular flow model, if households spend $65 billion on goods and $85 billion on services, how much in revenue do businesses receive in the product market? Multiple Choice $65 billion $85 billion $20 billion $150 billion
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Step 1: In the circular flow model, households spend money on goods and services in the product market. Show more…
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In the circular flow diagram, which of the following is true in the product market? (A) Households sell goods and services to business firms. (B) Households sell resources to business firms. (C) Business firms sell resources to households. (D) Business firms sell goods and services to households. (E) Households buy resources from business firms.
According to the circular flow model, which of the following is true? A) Households transact only in the product market. B) Income flows from domestic firms to the nonproduction sector and back again. C) Firms are demanders in the product market and supplier in the factor market. D) All of the above. E) None of the above
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