Question

Who are the two main participants in the circular flow model?

1) Households and firms
2) Government and firms
3) Consumers and producers
4) Savers and borrowers

Answer 1

The two main participants in the circular flow model are households and firms.

Step-by-step explanation:

In the circular flow model, the two main participants are households and firms. Households are the consumers who demand and consume goods and services, while firms are the producers who sell goods and services in the market. These two groups interact in the goods and services market and the labor market.