1. In the circular flow model, what are the two major markets? Define each sector in detail and give examples?
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3. What roles do households play and what roles do businesses play in each market? Explain the circular flow in detail.
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5. Describe the three basic forms of businesses in detail list examples of each (sole-proprietorship, partnership and corporation).

 

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Costs Revenue of production BUSINESSES • Buy factors of production • Sell products Goods and services FACTOR MARKET • Households sell • Firms buy PRODUCT MARKET • Firms sell • Households buy Money income ( Labour, land, capilar preneurial terest, profits) ability entre- (wages, rents, HOUSEHOLDS • Sell factors of production • Buy products Goods and serv expenditures Consumption expe Costs Revenue of production BUSINESSES • Buy factors of production • Sell products Goods and services FACTOR MARKET • Households sell • Firms buy PRODUCT MARKET • Firms sell • Households buy Money income ( Labour, land, capilar preneurial terest, profits) ability entre- (wages, rents, HOUSEHOLDS • Sell factors of production • Buy products Goods and serv expenditures Consumption expe

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Two Major Markets in the Circular Flow Model 1 Product Market Definition The product market represen... View the full answer