In the circular-flow diagram,the product market is where:
A)firms buy goods and services.
B)firms buy resources used to produce goods and services.
C)households buy goods and services.
D)households buy resources used to produce goods and services.

Question

Quizplus · Accepted Answer

The product market is where households buy goods and services. This is because households are the consumers in the economy, and they purchase goods and services from businesses in the product market. The other options listed (A, B, and D) refer to the resource market, where firms buy inputs such as labor and capital from households.

In the Circular-Flow Diagram,the Product Market Is Where