In the simple circular flow model:Multiple Choicebusinesses are suppliers of final products.there are real flows of goods, services, and factors, but not money flows.households are suppliers of final products.households are demanders of factors of production.
Question
In the simple circular flow model:Multiple Choicebusinesses are suppliers of final products.there are real flows of goods, services, and factors, but not money flows.households are suppliers of final products.households are demanders of factors of production.
Solution
In the simple circular flow model:
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Businesses are suppliers of final products: This is true. In the simple circular flow model, businesses produce goods and services and sell them in the market.
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There are real flows of goods, services, and factors, but not money flows: This is false. The model includes both real flows (goods, services, and factors of production) and money flows (income, consumption expenditure, etc.).
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Households are suppliers of final products: This is false. In the model, households consume the final products, they do not supply them.
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Households are demanders of factors of production: This is false. Households supply factors of production (like labor, land, and capital) and businesses demand these factors to produce goods and services.
So, the correct answer is "businesses are suppliers of final products."
Similar Questions
Item 5In the simple circular flow model:Multiple Choicehouseholds are demanders of factors of production.businesses are suppliers of final products.households are suppliers of final products.there are real flows of goods, services, and factors, but not money flows.
In the circular flow model:Multiple Choiceall of these hold true.households receive income through the factor market.households supply factors of production to firms.households spend income in the product market.
The simple circular flow model shows that:Multiple Choicehouseholds are on the demand side of both product and factor markets.businesses are on the supply side of both product and factor markets.households are on the supply side of the factor market and on the demand side of the product market.businesses are on the demand side of the product market and on the supply side of the factor market.
Select Any One Of the Following Options: In a typical circular flow model describing the interaction of businesses and households, which of the following is/are true? I. Households buy factors of production and goods II. Firms buy factors of production and goods III. Households buy factors of production IV. Firms buy factors of production V. Firms buy goods VI. Households buy goodsV and VI onlyI onlyIII and IV onlyIV and VI onlyII only
Which of the following is a limitation of the simple circular flow model?Multiple Choiceproduct markets are ignored.resource markets are ignored.The determination of product and resource prices is not explained.households are included, but not businesses.
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