Figure 2-18
-Refer to Figure 2-18. One segment of the circular flow diagram in the Figure shows the flow of funds from market F to economic agents G. The funds represent spending on goods and services. What is market F and who are economic agents G?
A) F = factor markets; G = households
B) F = product markets; G = households
C) F = factor markets; G = firms
D) F = product markets; G = firms

Question

Figure 2-18 
-Refer to Figure 2-18. One segment of the circular flow diagram in the Figure shows the flow of funds from market F to economic agents G. The funds represent spending on goods and services. What is market F and who are economic agents G?
A) F = factor markets; G = households 
B) F = product markets; G = households 
C) F = factor markets; G = firms 
D) F = product markets; G = firms

Quizplus · Accepted Answer

In the circular flow diagram, product markets are where goods and services are bought and sold. Firms sell goods and services in these markets, and the spending on these goods and services flows from the product markets to the firms.

Figure 2-18 -Refer to Figure 2-18. One Segment of the Circular Flow