The Simple Circular Flow Model Shows That

question 33

Multiple Choice

The simple circular flow model shows that:

• A)households are on the demand side of both product and factor markets.
• B)businesses are on the supply side of both product and factor markets.
• C)households are on the supply side of the factor market and on the demand side of the product market.
• D)businesses are on the demand side of the product market and on the supply side of the factor market.

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Definitions:

Raw Materials

Basic materials from which products are made, including metals, plastics, textiles, and natural resources.

Short-term Contracts

Employment agreements with a limited duration, typically less than one year.

Product Layout

An arrangement where workstations or machinery are sequenced according to the steps in which a product is made, facilitating a continuous flow of production.

Supply Sources

Supply sources are origins or places from which goods, materials, or resources are obtained to fulfill the needs of production or consumption.