As the Circular Flow Model Points Out, a Choice That

question 101

Multiple Choice

As the circular flow model points out, a choice that households make is how

• A)many resources a firm will hire.
• B)many goods and services are produced.
• C)much the government will collect in taxes and how much the government will spend on transfer payments.
• D)much labor is hired.
• E)many goods and services are purchased.

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Definitions:

Significant Influence

The power to participate in the financial and operating policy decisions of an investee, but not control those policies, typically evidenced by ownership of 20% to 50% of the voting stock.

Fair Value

An accurate valuation of an asset or liability derived from current market conditions and agreed upon by knowledgeable, willing parties in an arm's length transaction.

Fair Value Through Profit or Loss

An accounting method where changes in fair value of investments are recorded in the profit or loss for the period.

Common Shares

Equity ownership units in a corporation, entitling holders to votes at shareholder meetings and to a share in the company's profits.