In the circular flow model, households receive income from the _____ market and save through the _____ market.
A) goods; financial
B) factor; financial
C) goods; factor
D) factor; goods

Question

Quizplus · Accepted Answer

In the circular flow model, households are the owners of factors of production and they sell these factors (such as labor and capital) to firms in the factor market. So, households receive income from the factor market. Then, households can save their income by investing it in the financial market. Therefore, households save through the financial market.

In the Circular Flow Model, Households Receive Income from the _____