1.1.3 Economic Agents

• Households make decisions about consumption and labor supply
• What do governments make decisions about?

  Public services and regulations
• What two key decisions do households make?

  What to buy, how much to work
• Governments decide on taxes, public spending, and regulations.


  True
• Firms serve as producers and employers
• Which economic agent decides what to buy and how much to work?

  Households
• What do governments set taxes for?

  Public spending
• Firms decide what to produce and how many to employ
• What is an example of the government acting as a provider?

  Funding healthcare
• Economic agents are individuals, groups, or organizations that make economic decisions.


  True
• What are economic agents?

  Make economic decisions
• Firms decide about production and employment.

  True
• Match the economic agent with their primary role:

  Households ↔️ Consumer and laborer

  Firms ↔️ Producer and employer

  Governments ↔️ Provider and regulator
• Firms decide what to produce and how many to employ
• What role do households play in the economy?

  Consumers and laborers
• Governments function as both providers and regulators.

  True
• Households act as consumers and laborers
• What are the two main decisions households make?

  What to buy, how much to work
• The government's decisions on taxes influence the overall economy.


  True
• The government uses taxes to fund public services
• What are economic agents defined as?

  Groups that make economic decisions
• Governments primarily function as providers and regulators in the economy


  True
• What are the two roles of households in the economy?

  Consumers and laborers
• Governments set taxes and public spending as regulators


  True
• Firms pay taxes to the government, who in turn provide public goods and services
• Interdependent relationships between economic agents create a dynamic economic system


  True
• Households act as consumers and laborers
• Match the economic agent with their role:

  Households ↔️ Consumers and laborers

  Firms ↔️ Producers and employers

  Governments ↔️ Providers and regulators
• Firms serve as producers and employers
• Describe the circular flow between households and firms:

  1️⃣ Households provide labor to firms

  2️⃣ Firms produce goods and services for households

  3️⃣ Households consume goods and services
• How do governments impact household incomes and spending?

  Through policies