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How does money make the circular flow model more efficient?

A. Product and factor market cannot exist without money

B. Money is more important in the product market than in the factor market

C. Firms have more money than households

D. Money becomes the medium of exchange and eliminates the need to barter.

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Yusra Anees
Yusra AneesLv10
22 Dec 2020

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Related questions

What role does money play in the circular flow model of a market economy?

a. It allows the households to bribe the firms into giving them what they want.

b. It increases the need for a barter economy.

c. It increases the efficiency of a market.

d. It increases the chances of having a double coincidence of wants other than money.

 

Using the circular flow model, explain the flow of money and goods in an economy. Furthermore which option explains how money flows from households to business? 

a) factor markets

b) product markets

c) neither factor markets not product markets 

d) both factor and product markets

 

Based on the circular flow model, money flows from households to businesses in:

a. factor markets

b. product markets

c. neither product nor factor markets.

d. both product and factor markets

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