Which one of the following is an example of the circular flow model and shows the interdependence of households and firms?
a. Households demand their resources from the firms in the factor markets and, in turn, supply in the product market the goods and services produced by firms.
b. The firms go to the resource market to supply resources that households demand and, in turn, provide households with the goods and services produced for the product markets.
c. Households supply their resources to the firms in the factor markets and, in turn, demand in the product market the goods and services produced by the firms.
d. The firms in the factor markets pay to households in the form of wages, interest, rent and profit?for resources demanded.
e. The circuit is completed when the payments flow from households, through the product markets, and to the firms for the goods and services they demand.
c
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Real business cycle theory emphasizes the role of
A) government spending as a cause of economic fluctuations. B) shocks to the money supply as a cause of economic fluctuations. C) demand shocks as a cause of economic fluctuations. D) technology shocks as a cause of economic fluctuations.
Assume that Burger King employees work in an air-conditioned environment while McDonalds employees do not. Other things equal, you would expect wages to be ____ in Burger King because ____
a. higher; Burger King employees are more productive b. lower; McDonald's employees are more productive c. higher; Burger King is a more prestigious place to work d. lower; Burger King has more favorable working conditions