the top fill in the blank responses are between 1. firms OR household 2. resourc

Question

the top fill in the blank responses are between
1. firms OR household
2. resources OR goods and services.

1. The circular-flow model The following diagram presents a circular-flow model of a simple economy. The outer set of arrows (shown in green) shows the flow of dollars, and the inner set of arrows (shown in red) shows the corresponding flow of inputs and outputs. Markets for Goods and Services Firms Households Markets for Factors of Production Based on this model, households earn income when purchase in resource markets. Suppose Frances earns $825 per week working as a programmer for PC Pros. She uses $9 to get her car washed at Spotless Car Wash. Spotless Car Wash pays Dmitri $350 per week to wash cars. Dmitri uses $300 to purchase software from PC Pros

Explanation / Answer

1. firms

2. resources

Households earn income when firms purchases resources from resource market which is controlled by households who take dollars in return of providing resources to the firms.

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