In the Circular Flow Model with the Government Sector, Transfers

question 69

Multiple Choice

In the circular flow model with the government sector, transfers

• A) to firms flow in the same direction as rent, wages, interest and profits.
• B) flow in the opposite direction to taxes.
• C) to households flow in the same direction as expenditures on goods and services.
• D) flow only through the goods market.
• E) flow in the same direction as taxes.

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Definitions:

Net Income

The total earnings of a company after subtracting all expenses from revenue, also known as the bottom line.

Constant Percentage

A fixed proportion or rate that is applied to a specific calculation, such as in investment strategies or financial formulas.

Tax Rate

The percentage at which an individual or corporation is taxed, often varying based on income or profit levels.

Cash Dividends

Dividends paid in the form of cash to shareholders, typically out of the company's current or retained earnings.