Concept:The three-sector economy adds the government to the two basic private sectors: households and firms.
Explanation:A two-sector economy consists of households and firms only.
When the government is included, it becomes a three-sector economy.
Thus, the three components are households, firms, and the government.
The government influences this economy through public expenditure and taxation.
Public expenditure acts as an injection, while taxation acts as a withdrawal.
Options A, B, and D do not correctly represent the standard macroeconomic sectors.
Answer:C. households, firms and the government