Question

5.Who earns money and spends their income on goods and services?

(1 Point)

Firms

Businesses

Households

Schools


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Answer 1

Answer:

Firms

Explanation:

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Answer 2

Option c is the correct answer.

Households earn money and spend their income on goods and services.

1. Households earn money in the form of factor income that they receive by providing services to the firms.
2. The factor incomes can be in the form of wages, rent, profit etc.
3. In the circular flow it is indicated that this income is given to firms and in return goods and services are received.