In the circular-flow diagram, the places where resources, especially capital and labor, are bought and sold are the:
A) product markets.
B) factor markets.
C) households.
D) firms.

Question

Quizplus · Accepted Answer

The factor markets are where resources, such as capital and labor, are bought and sold. The product markets are where finished goods and services are bought and sold. Households are the owners of the resources and consume goods and services, while firms are the producers of goods and services.

In the Circular-Flow Diagram, the Places Where Resources, Especially Capital