Which Actor in the Simplified Circular Flow Model Buys or Rents

question 5

Multiple Choice

Which actor in the simplified circular flow model buys or rents land, labor, and capital?

• A) Firms
• B) Households
• C) Markets for factors of production
• D) Government

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Definitions:

Trustee

A person who operates a trust for beneficiaries in a business trust. In bankruptcy proceedings, an individual who takes over administration of a debtor’s estate.

Secured Party

An individual or entity that has a legal interest or lien on a debtor's property, secured by a security agreement, ensuring priority payment in case of debtor's default.

Collateral

Property or other assets that a borrower offers to a lender to secure a loan.

Court Order

An official directive issued by a judge that requires a party to do or refrain from doing something.