What determines the income flows that households receive? A. an agency of the Federal government B. their ownership of factors
of production, how much they sell in the factor markets, and the prices received when sold C. what they choose to consume D. what they choose to produce, how much is sold, and the price received when sold E. financial institutions such as banks
B. their ownership of factors of production, how much they sell in the factor markets, and the prices received when sold
Explanation:
Ownership of factor of productions such as land, capital, labour and entrepreneurship services hired to a firm determines the income level of a family. A household can generate income from a land they hire out or produce on, they can also generate income from capital used in an investment. They can sell factors of production such as labour and technical know-how in the factor market and get paid for it. These are the major determinants of income flow in a household.
