What are the two basic markets in the simple circular-flow model?

Question

Quizplus · Accepted Answer

The simple circular-flow model includes two basic markets: the product market, where households purchase goods and services produced by businesses; and the resource market, where businesses purchase the resources (such as labor and capital) necessary to produce those goods and services. Option B is incorrect because the export market is a component of the product market, not a separate market. Option C is incorrect because the import market is not included in the simple circular-flow model. Option D is also incorrect because the household market and business market are not distinct markets in this model, but are instead part of the overall product and resource markets.

What Are the Two Basic Markets in the Simple Circular-Flow