In the Below Circular Flow Diagram, the Household and Business

question 4

Essay

In the below circular flow diagram, the household and business sectors are labelled with arrows representing the flows of income and output labelled (a) through (f) and the two appropriate markets labelled (g) and (h).Supply the correct descriptive titles for each of these labels (a) through (h).

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Definitions:

Lender

An individual, a financial institution or another entity that provides funds to others with the expectation that the funds will be repaid, typically with interest.

Current Liability

This refers to debts or obligations that are due to be paid within one year or within the normal operating cycle of the business, whichever is longer.

Current Assets

Assets that are expected to be converted into cash, sold, or consumed within one year or within the normal operating cycle.

Discounted Note

A type of debt instrument that is sold or redeemed for less than its face value but whose actual value matures to the full face amount at a later date.