Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
Circular flow diagram with three sectors: households, business firms, financial markets, and the government
Expert Solution
Step 1: Define house hold sector
It can be defined as a term that represents individuals or families who supply factors of production which encompasses labor, land, and capital to the different kinds of businesses in the economy and receive income in return for the work in those businesses. The income that an individual gets includes wages, rent, and interest.
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