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The Outer Loop of the Circular-Flow Diagram Represents the Flows

question 52

Multiple Choice

The outer loop of the circular-flow diagram represents the flows of dollars in the economy.Which of the following does not appear on the outer loop?


Definitions:

Quality Ratings

Assessments of the creditworthiness or quality of corporations and government bonds, often provided by credit rating agencies.

Required Rates

The minimum returns demanded by investors or lenders to compensate for the risk of an investment or loan.

Bonds

Bonds are debt securities issued by corporations or governments to raise funds, where the bond issuer agrees to pay back the principal along with interest.

Zero Coupon Issue

A bond or debt security that doesn’t pay periodic interest but is traded at a discount, realizing gains at maturity.

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