The circular flow model assumes:
a. businesses and households own the factors of production.
b. businesses own the factors of production.
c. government owns the factors of production.
d. households own the factors of production.
e. firms, households, and the government own the factors of production.
Question 2
Based on the circular flow model, goods and services flow from:
a. households to businesses in product markets.
b. businesses to households in product markets.
c. households to businesses in factor markets.
d. businesses to households in factor markets.
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