As Depicted in the Circular Flow Diagram, Firms

question 2

Multiple Choice

As depicted in the circular flow diagram, firms

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

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Definitions:

College Degree

A college degree is an academic degree awarded by colleges or universities upon completion of a course of study demonstrating mastery in a specific field of study or professional practice.

Opportunity Cost

The economic disadvantage of forgoing the subsequent best option when a choice is being made.

Graduate Program

An advanced academic and professional course of study beyond the bachelor's degree.

Inflation

The rate of acceleration in the average pricing of goods and services, thereby diminishing the power of purchase.