Figure 6-1 Shows the Circular Flow Model Where Only Consumption

question 65

Multiple Choice

Figure 6-1 shows the circular flow model where only consumption goods are being produced. Use the figure to answer questions .
Figure 6-1
-Refer to Figure 6-1. The arrow marked "B" represents the flow of:

• A) factors of production.
• B) factor incomes.
• C) personal consumption expenditures.
• D) consumer goods and services.

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Definitions:

Days' Sales In Inventory

A financial metric indicating the average number of days that a company holds its inventory before selling it.

Full-Capacity Level

The maximum level of output a company can produce and sell with its current resources and without incurring significant additional costs.

Operating Capacity

The maximum amount of work that an organization can complete in a given period under normal circumstances.

Sales

The total amount of goods or services sold by a company during a specific period, often seen as a critical measure of business performance.