Question

According to the circular flow model, how do households participate in the two markets?

Answer 1

Answer:

C. They buy the stuff they want in the goods and services market and sell their labor in the resource market.

Explanation:

The circular flow model describe how money moved around/distributed within society.

Every households can play the role as consumers and producers within the circular flow model.

As a consumers, households use their money to purchase goods and services from other producers. As a producers, households sell their labors to another business in exchange of salary/wage. The salary that the households receive will be circulated back when they purchase another goods/services and the cycle will keep going on.