![]() An increase in the unemployment rate may be represented as a movement from a point on the production possibilities frontier to a point inside the frontier. It illustrates the balance between injections and leakages in our economy. The economy consists of millions of people engaged in many activities-buying, selling, working, hiring, manufacturing, and so on. households are on the demand side of both product and factor markets. The simple circular flow model shows that: A. households are on the supply side of the factor market and on the demand side of the product market. B) Households are neither buyers nor sellers in the input market. Each of these three parts of the economy are affected by the actions of the others. In the simple circular flow model quizlet financial markets to the basic model.
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