In the simple circular flow model, the two markets are:
A) capital goods and consumer goods markets.
B) goods and services markets.
C) product and resource markets.
D) households and firms markets.
E) domestic and foreign markets.

Question

Quizplus · Accepted Answer

The simple circular flow model consists of two markets: the product market and the resource market. The product market is where firms sell goods and services to households, while the resource market is where households sell their labor and other resources to firms. Therefore, choice C (product and resource markets) is the correct answer.

In the Simple Circular Flow Model, the Two Markets Are