why-is-it-significant-that-households-own-the-factors-of-production-in-the-circu

Question

Why is it significant that households own the factors of production in the circular flow diagram?

Accepted Answer

It enables households to receive income from selling resources.

Answer

It prevents firms from accessing necessary resources.

Answer

It ensures that households can dictate market prices.

Answer

It allows households to control the production of goods and services.