In the Circular Flow Diagram, Firms

question 14

Multiple Choice

In the circular flow diagram, firms:

• A) demand the inputs that households supply in product markets.
• B) demand the goods and services that households supply in product markets.
• C) supply the goods and services that households demand in product markets.
• D) supply the inputs that households demand in factor markets.

---

Definitions:

Personality Test Scores

Quantitative assessments derived from tests designed to measure various aspects of an individual’s personality traits and characteristics.

Fundamental Attribution Error

The inclination to attribute the actions of others more to their character traits than to the external situations influencing them, downplaying the impact of contextual circumstances.

Situational Constraints

External factors that restrict or dictate an individual's behavior, reducing freedom of action.

Underestimating

The act of judging something to be smaller or less important than it actually is, often leading to miscalculation or oversight.