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

Question

Quizplus · Accepted Answer

Product markets are the places where goods and services are bought and sold by firms and households. Factor markets, on the other hand, are the places where resources like labor, capital, and land are bought and sold by firms and households. Households and firms are the participants in the circular flow of income model. Therefore, the best answer is A) product markets.

In the Circular-Flow Diagram, the Places Where Goods and Services