In the Circular flOw Model, Households Offer the Services of Factors

question 10

True/False

In the circular flow model, households offer the services of factors of production to firms in return for income.

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Definitions:

Capital Goods

Physical assets that a company uses in the production process to manufacture products and services that consumers will later use.

Specialization

The process of focusing resources on the production of specific goods or services to achieve greater efficiencies and economies of scale.

Economically Beneficial

Activities or decisions that result in a net gain in economic value, improving the economic welfare of individuals or society as a whole.

Larger Output

Refers to the increased production of goods or services by a company or economy.