Consider the Circular Flow of Income and Expenditure in the Canadian

question 40

Multiple Choice

Consider the circular flow of income and expenditure in the Canadian economy.Which of the following is a withdrawal from the circular flow?

• A)investment
• B)consumption
• C)saving
• D)exports
• E)government purchases

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Definitions:

Periodic Net Income

The net earnings or loss for a specific reporting period, reflecting the company's operational efficiency and earnings capacity.

Cash Basis

A financial recording technique that only acknowledges income and expenditures upon the actual receipt or disbursement of cash.

Revenue Recognition

The accounting principle that dictates the specific conditions under which income is recognized by an entity.

Accrual Basis

An accounting method that records revenues and expenses when they are earned or incurred, regardless of when the cash transaction happens.