Decision-makers in an economy include households, firms and government. What are these decision-makers collectively called?

Decision-makers in an economy include households, firms and government. What are these decision-makers collectively called?

• A. Economic Agents
• B. Households
• C. Firms
• D. Markets

Answer: (A)

Decision-makers in an economy are called economic agents. This label covers anyone who makes choices about what to consume, produce, or save. Households decide how much to spend and how much to work, firms decide what to produce and how many workers to hire, and the government decides on spending and taxes. Markets, meanwhile, are the places or mechanisms where these decisions interact, not the decision-makers themselves. So the umbrella term for all these decision-makers is economic agents.

Decision-makers in an economy are called economic agents. This label covers anyone who makes choices about what to consume, produce, or save. Households decide how much to spend and how much to work, firms decide what to produce and how many workers to hire, and the government decides on spending and taxes. Markets, meanwhile, are the places or mechanisms where these decisions interact, not the decision-makers themselves. So the umbrella term for all these decision-makers is economic agents.