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

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

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

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

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

Respuesta :

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.