Businesses play a role in the circular flow of goods by:A.creating the goods sold at product markets.B.offering labor to product markets for a fee.C.providing natural resources to resource markets.D.consuming products created in households.
Question
Businesses play a role in the circular flow of goods by:A.creating the goods sold at product markets.B.offering labor to product markets for a fee.C.providing natural resources to resource markets.D.consuming products created in households.
Solution
Businesses play a role in the circular flow of goods by A. creating the goods sold at product markets.
Here's the step by step explanation:
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Businesses are the producers in the economy. They use resources to create goods or services which they then sell to consumers in the product markets.
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The term "product markets" refers to the marketplace where final goods or services are traded between buyers and sellers. It is where businesses sell their products to consumers.
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Therefore, businesses contribute to the circular flow of goods by creating and supplying the goods that are sold in these markets.
The other options B, C, and D are not correct because businesses do not offer labor to product markets for a fee, they do not provide natural resources to resource markets (they are consumers of resources), and they do not consume products created in households (households are the consumers).
Similar Questions
Which statement best describes one way businesses participate in the circular flow of goods?A.Businesses provide the labor that works in resource markets.B.Businesses trade goods between product and resource markets.C.Businesses provide revenue to households that sell products.D.Businesses create goods for product markets to sell.
Households play a role in the circular flow of goods by:A.selling goods that companies produce.B.purchasing goods at product markets.C.designing and producing new goods.D.providing natural resources to businesses.
Which statement best illustrates the relationship between three different elements of the circular flow of products?A.Product markets create new goods for households, which purchase them directly from businesses.B.Resource markets sell materials to businesses, which use them to make goods sold to households.C.Businesses provide goods to resource markets, which sell them directly to households.D.Households design new products for businesses, which market them using resource markets.
Which situation best illustrates the role of households in the circular flow of goods?A.A website sells T-shirts promoting a popular band.B.A factory produces parts used to make new cars.C.A family buys a new TV at an electronics store.D.A company develops a new brand of smartphone.
In the circular flow model, which part of the economy would provide materials to businesses?A.HouseholdsB.Resource marketsC.BusinessesD.Product marketsSUBMITarrow_backPREVIOUS
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