Question

In the simple circular flow model of the economy, which one of the following best characterizes...

In the simple circular flow model of the economy, which one of the following best characterizes the activities of households?

a.

Households provide all the factors of production and produce all goods and services.

b.

Households pay for all the factors of production and consume all the output of business firms.

c.

Households are paid fo the use of all the factors of production and produce all the output.

d.

Households provide all the factors of production for business firms and consume all the output of the firms

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Answer D. Households provide all the factors of production for business firms and consume all the output of the firms.
Reason: Households provide services to business firms as factors of production that business firms hire in the factor market for the production of output. On the other hand, the households buy output (goods and services from firms) in the product market by acting as major consumers.
Circular flow income is basically an economic model showing the operation of an economic system. It reflects a circular flow of factors, goods and services and flow of money in the economy.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Which of the following statements is true in the simple circular flow model? a There is...
Which of the following statements is true in the simple circular flow model? a There is no government and no foreign sector (closed economy). b Households make factor payments to firms for the resources they supply, which are used to produce goods and services. c Factor prices are determined by the interaction of supply and demand of resources. d All of the above. e Only a) and c)
In the simple Circular Flow Model, we use output and input markets to connect households and...
In the simple Circular Flow Model, we use output and input markets to connect households and firms together. Which of the following statements about the market is NOT correct? Output market is where firms provide goods and services to households. Input market is where households sell or lease their labour, capital and human capital. Output market is where firms exchange goods and services for revenue. Input market is where households spend income on buying goods and services.
Problem 2 The Circular Flow Model Please answer the following questions a true or false. 1....
Problem 2 The Circular Flow Model Please answer the following questions a true or false. 1. There are three economic actors in our circular flow model: households, firms and markets. 2. The ultimate goal for households is to acquire goods and services. 3. The ultimate goal for firms is to acquire land, labor and capital. 4. The following are all factors of production - land, labor, capital, and goods and services 5. Firms own the factors of production. 6. The...
In the circular flow model, money flows from: Select one: a. the government to firms for...
In the circular flow model, money flows from: Select one: a. the government to firms for goods and services. b. the government to households for taxes. c. firms to foreign economies for exports. d. foreign economies to households for exports.
22. In a circular flow diagram, what does the financial flow from business firms to households...
22. In a circular flow diagram, what does the financial flow from business firms to households consist of?                    Expenditures on goods and services           Payments for resources           Real goods and services           Taxes and transfer payments 24. Which 2 sectors of the macro-economy are included in a 2-sector circular flow diagram? (check all that apply)                 Business firms           Government           Households           International trade           Labor 25. What does BLS say is the current natural rate of unemployment?                    4.0%           5.5%           10.2%...
In the circular-flow diagram, firms produce a. goods and services using factors of production. b. output...
In the circular-flow diagram, firms produce a. goods and services using factors of production. b. output using inputs. c. factors of production using goods and services. d. Both (a) and (b) are correct.
Question 19 (1 point) Which of the following statements is true in the simple circular flow...
Question 19 (1 point) Which of the following statements is true in the simple circular flow model? a Income flows into the households as a result of their supply of resources to firms. b Since there is no saving in this simple model, households use all their income for spending in goods and services supplied by firms. c When firms sell their goods, the money they receive is called revenue, which is used to pay for the resources firms hire....
20] You would expect a society with a traditional economy to have most of its economic...
20] You would expect a society with a traditional economy to have most of its economic activity directed toward: A) agriculture. B) manufacturing. C) production of services. D) real estate management. [21] In a market economy, the willingness and ability of buyers to purchase goods and services helps to: A) set the prices of those goods and services. B) determine who gets the goods and services. C) determine what goods and services will be produced and in what quantities. D)...
In the circular flow diagram, 1) income and spending in the model are never equal. 2)...
In the circular flow diagram, 1) income and spending in the model are never equal. 2) the value of the goods and services produced in the economy and income cannot be the same. 3) the only player is households. 4) income must always equal spending which equals the value of goods and services produced in the economy.
11. Which of the following statements is (are) correct? a. Relative to some other scientists, economists...
11. Which of the following statements is (are) correct? a. Relative to some other scientists, economists find it more difficult to conduct experiments. b. Theory and observation are important in economics as well as in other sciences. c. To obtain data, economists often rely upon the natural experiments offered by history. d. All of the above are correct. 12. For an economist, the idea of making assumptions is regarded generally as a a. bad idea, since doing so leads to...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT