Which Actor in the Circular Flow Model Is on the Supply

question 80

Multiple Choice

Which actor in the circular flow model is on the supply side of the factor market?

• A)Firms
• B)Households
• C)Market for goods and services
• D)Government

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Definitions:

Oil Production

The process of extracting crude oil from the earth and preparing it for sale, including exploration, drilling, and refining.

Favorable Supply Shock

An unexpected event that increases the supply of goods or services, typically leading to lower prices for those goods or services.

Short-run Phillips Curve

A concept in economics that illustrates an inverse relationship between inflation and unemployment within a certain period, implying that lower unemployment in the short run can come with higher levels of inflation.

Central Bank

An institution that manages a country's currency, money supply, and interest rates, overseeing the commercial banking system.