Which of the following is true according to the circular flow model?
A. Firms are suppliers in both the product and factor markets.
B. Firms are demanders in the product markets and suppliers in the factor markets.
C. Households are demanders in both the product and factor markets.
D. Households are demanders in the product markets and suppliers in the factor markets.
E. The government is a demander in the product market only.
Ans: D. Households are demanders in the product markets and suppliers in the factor markets.
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