The simple circular ﬂow model shows that workers and capital owners offer their services to ﬁrms through the
A) product markets.
B) resource markets.
C) money markets.
D) ﬁnancial markets.

Question

Quizplus · Accepted Answer

The resource markets represent the interactions between workers and capital owners, who offer their services (labor and capital) to the firms in exchange for payment. The product markets, on the other hand, represent the interactions between firms and households, where firms sell their goods and services to households in exchange for payment. Money and financial markets are not directly related to the supply of labor and capital.

The Simple Circular ﬂOw Model Shows That Workers and Capital