Final answer:
Households in the circular flow model own factors of production and exchange them for money with firms in the factor market.
Explanation:
In the circular flow model, households are the group that owns the factors of production and exchanges them for money in the factor market. This means that households supply factors of production like labor, capital, and natural resources to firms in exchange for income.
Firms then use these factors of production to produce goods and services, which are supplied back to households in product markets, completing the cycle of the circular flow model.
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