In the circular flow model, households supply resources such as labour services in the product market.

Question

Quizplus · Accepted Answer

In the circular flow model, households supply resources such as labour services, land, capital, and entrepreneurship in the factor market and receive income in return. This income is then spent on goods and services in the product market, which completes the circular flow of income and output. Hence, option A is correct.

In the Circular Flow Model, Households Supply Resources Such as Labour