In the Simple Circular-Flow Diagram,households

question 35

Multiple Choice

In the simple circular-flow diagram,households

• A)are the only decision makers.
• B)own the factors of production.
• C)are buyers of inputs.
• D)consume only some of the goods and services that firms produce.

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Definitions:

Call Premium

The amount by which the price of a call option exceeds its intrinsic value, reflecting the cost to buy the option.

Yield to Call

The return a bondholder can expect if the bond is held until the call date, before the bond's maturity.

Annual Coupon

The yearly interest payment made by a bond to its holder.

Par Value

A legal amount per share established by a company's charter, not necessarily related to market value, often used for accounting purposes.