The circular flow model shows that, in the factor markets, households purchase goods and services, while firms sell inputs.

Name: The circular flow model shows that, in the factor markets, households purchase goods and services, while firms sell inputs.
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In the circular flow model, households sell inputs (labor, land, capital) in the factor markets to firms, and purchase goods and services from firms in the product markets.

The Circular Flow Model Shows That, in the Factor Markets