In the Markets for Goods and Services in the Circular-Flow

question 31

Multiple Choice

In the markets for goods and services in the circular-flow diagram,

• A)households and firms are both buyers.
• B)households and firms are both sellers.
• C)households are buyers and firms are sellers.
• D)households are sellers and firms are buyers.

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Definitions:

Countertrade

A trading practice where goods and services are exchanged for other goods and services without the use of money.

Economic Order Quantity

A formula used in inventory management to determine the optimal order quantity that minimizes total inventory costs.

Nonprofit Organization

An organization that operates for purposes other than making a profit, focusing instead on furthering a social cause or shared goal.

Nongovernmental Organization

An independent, not-for-profit organization that works towards social, environmental, or political goals.