In the Circular-Flow Diagram

question 248

Multiple Choice

In the circular-flow diagram,

• A)taxes flow from households to firms,and transfer payments flow from firms to households.
• B)income payments flow from firms to households,and sales revenue flows from households to firms.
• C)resources flow from firms to households,and goods and services flow from households to firms.
• D)inputs and outputs flow in the same direction as the flow of dollars,from firms to households.

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Definitions:

Quota

A governmental restriction on the quantity of a specific good that can be imported or exported within a given time frame, used to regulate trade.

Excise Tax

A tax on the production, sale, or consumption of a particular good or service, often levied by the government.

SUVs

Sport Utility Vehicles characterized by their capacity to accommodate more passengers, their off-road capabilities, and higher driving position.

FICA Tax

A United States federal payroll tax imposed on both employees and employers to fund Social Security and Medicare—federal programs that provide benefits for retirees, the disabled, and children of deceased workers.