The circular flow model is an abstract representation of the interaction between households and firms through the institutions of
A) government and financing outlets
B) church and state
C) property and law
D) resource and product markets
E) trade and conflict

Question

Quizplus · Accepted Answer

The circular flow model represents the interaction between households and firms through the resource (or factor) markets, where households provide labor and other resources that firms use to produce goods and services, and the product markets, where firms sell those goods and services back to households.

The Circular Flow Model Is an Abstract Representation of the Interaction