No Bull Economics Lessons

Macroeconomics & Microeconomics Concepts You Must Know

Macroeconomic Performance (2 of 10)

Question 2:
According to the circular flow model, ___________ earn revenue in the product market and ___________ sell resources in the factor market.

A.  households; businesses
B.  households; households
C.  businesses; households
D.  businesses; businesses

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Correct Answer: C, businesses; households. Businesses earn revenue from the products they sell to households. Households supply the land, labor, capital, and entrepreneurship to the businesses in the resource market.