In the simple circular flow model:
A)firms are suppliers of resources and demanders of products.
B)households are suppliers of products and demanders of resources.
C)households are demanders of products and suppliers of resources.
D)firms are the suppliers of both resources and products.

Question

In the simple circular flow model:
A)​firms are suppliers of resources and demanders of products.
B)​households are suppliers of products and demanders of resources.
C)​households are demanders of products and suppliers of resources.
D)​firms are the suppliers of both resources and products.

Quizplus · Accepted Answer

In the simple circular flow model, households are demanders of products as they consume goods and services provided by firms, and suppliers of resources as they offer their labor and other resources to firms in exchange for income. Firms are demanders of resources and suppliers of products.

In the Simple Circular Flow Model