Praxis II Citizenship

Answer: C - In the circular flow model of market economies, firms buy resources from households, which may include natural resources, such as produce or timber, or time resources, which is generally labor. Households (which can also be individuals) perpetuate the economic flow by paying firms for products in the goods market. However, the firms do not buy the households’ interest in making those purchases (not directly). Households sell their resources to firms in the resource market.