Which of the following best describes the role of households and firms in the circular flow model of the economy?   Firms provide households with factors of production in exchange for money; households provide firms with goods and services in exchange for money   Households provide firms with factors of production in exchange for goods and services   Households supply the factors of production to firms in exchange for money; firms supply goods and services to households in exchange for money   Firms and households exchange money with one another in the pursuit of higher incomes and profits

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
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Chapter1: Making Economics Decisions
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Which of the following best describes the role of households and firms in the circular flow model of the economy?

 
  1. Firms provide households with factors of production in exchange for money; households provide firms with goods and services in exchange for money

     
  2. Households provide firms with factors of production in exchange for goods and services

     
  3. Households supply the factors of production to firms in exchange for money; firms supply goods and services to households in exchange for money

     
  4. Firms and households exchange money with one another in the pursuit of higher incomes and profits

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