According to the Circular-Flow Diagram, GDP

question 314

Multiple Choice

According to the circular-flow diagram, GDP

• A) can be computed as payments firms make to factors of production plus revenues they receive from the sales of goods and services.
• B) can be computed as the revenue firms receive from the sales of goods and services minus the payments they make to factors of production.
• C) can be computed as either the revenue firms receive from the sales of goods and services or as revenues they receive from the sales of goods and services.
• D) can be computed as the payments firms make to factors of production, but not as revenues they receive from the sales of goods and services.

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Definitions:

Independent Variable

A variable in an experiment or study that is manipulated or changed by the researcher to observe its effect on the dependent variable.

Regression Equation

An equation that describes the statistical relationship between one dependent variable and one or more independent variables.

Slope

The measure of the steepness or incline of a line, representing the rate of change of the function.

Dependent Variable

This refers to the variable within an experiment or study that is predicted to alter following modifications in the independent variable.