Question

How do households, businesses, and governments interact in a market economy?

Answer 1

They all effect each other.

they all have rules, the government puts the rules and the buisnesses in place and the buisnesses have employees and those buisness's have to sell things for the housholds.

Answer 2

Households sell resources to the government—which uses those resources to produce government services—in return for income. Business firms sell the goods and services they produce to the government for revenue.