The Simple Circular-Flow Model for Households and Firms Is an Economic

question 140

Multiple Choice

The simple circular-flow model for households and firms is an economic model that focuses on the interaction between households and firms.Which of the following statements regarding the model is correct?

• A)The model is missing the interaction between firms and the resource market.Therefore,it cannot predict well.
• B)The model is missing the interaction between households and the product market.Therefore,it cannot predict well.
• C)The model has too many simplifying assumptions,and it cannot be used to make predictions about the real world.
• D)The model is a simplification of the real world,and it can be used to make predictions about the real world.
• E)The model is missing the interaction between firms and the product market.Therefore,it cannot predict well.

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Definitions:

Correlation Coefficient

A numerical measure that indicates the extent to which two variables fluctuate together, signifying the strength and direction of their relationship.

Standard Deviation

A statistical measure of the dispersion or variability within a set of data, indicating how spread out the numbers are from the mean.

Validity

The degree to which a tool, test, or study accurately measures or reflects what it is intended to measure.

Emotional Intelligence

The ability to recognize, understand, manage, and use one’s own emotions and those of others in positive ways.