Households are buyers and are also known as which term?

• A. Households
• B. Consumers
• C. Savers
• D. Workers

Answer: (B)

When households buy goods and services, their role is described as consumers. In the circular flow of income, households supply factors of production (like labor) and earn income, then spend part of that income on goods and services—their spending is called consumption. So, the term that best describes households in the role of buyers is consumers.

Savers and workers describe other roles households can have—saving money or providing labor—while the term households itself simply names the group. But as buyers, they are consumers.