A simplified model that shows how households and businesses interact with one another in the product market and resource market is known as the:
A) basic economic model.
B) production possibilities model.
C) free trade model.
D) circular flow model.

Question

Quizplus · Accepted Answer

The circular flow model illustrates the continuous movement of money, goods and services, and factors of production between households and businesses, capturing the interactions in both the product and resource markets.

A Simplified Model That Shows How Households and Businesses Interact