What are the flows in the market economy that go from firms to households and the flows from households to firms?
What will be an ideal response?
On the real side of the economy, goods and services flow from firms to households. On the monetary side of the economy, payments for factors of production, wages, rent, interest, and profits, flow from firms to households. Flowing from households to firms on the monetary side of the economy are the expenditures on goods and services and on the real side are the factors of production, labor, land, capital, and entrepreneurship.
You might also like to view...
Which of the following will most likely happen when better technology is used in production?
A) an upward movement along the production possibilities curve B) an outward shift of the production possibilities curve C) an inward shift of the production possibilities curve D) a downward movement along the production possibilities curve
It is sometimes difficult to transfer the advanced technologies of the industrialized nations to the DVCs because:
A. the technologies of the IACs are frequently based on relatively expensive labor and relatively cheap capital. B. the resource endowments of the IACs and the DVCs are highly similar. C. international patent laws prohibit such transfers. D. the technologies of the IACs are frequently based on relatively cheap labor and relatively expensive capital.