The Circular Flow Model Shows That

question 50

Multiple Choice

The circular flow model shows that:

• A)households are on the demand side of the resource market.
• B)firms are on the demand side of both the product and resource markets.
• C)households are on the supply side of the resource market and the demand side of the product market.
• D)firms and governments are on the supply side of the loanable funds market.
• E)governments are on the demand side of the product market and the supply side of the resource market.

---

Definitions:

Positive Cost Variance

Occurs when the actual cost of a project is less than the budgeted amount, indicating under-spending or efficiency.

Under Budget

A situation in which the actual spending is less than what was originally planned or allocated for a project or activity.

Management Reserves

Funds set aside by management for unforeseen changes in the scope or cost of a project.

Contingency Reserves

Allocated resources, time, or funds kept in reserve to address potential unforeseen obstacles or costs in a project.