As the Circular Flow Model Shows, the Factors of Production

question 56

Multiple Choice

As the circular flow model shows, the factors of production flow from

• A)households to firms through the goods market.
• B)firms to households through the factor market.
• C)firms to households through the goods market.
• D)the goods market through firms to the factor markets.
• E)households to firms through the factor market.

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Definitions:

Quantity Demanded

The total amount of a good or service that consumers are willing and able to purchase at a given price level, at a specific time.

Black Market

An illegal market where goods or services are traded without compliance with legal requirements, often including the sale of illicit goods.

Illegal Trading

Unlawful transactions of goods or services that may involve insider trading, market manipulation, or trading of illegal items.

Equilibrium Price

The price at which the quantity of a good demanded by consumers equals the quantity supplied by producers, leading to market stability.