In the Circular Flow Diagram What Are the Three Types

question 78

Essay

In the circular flow diagram what are the three types of payments from firms to factors of production? Is the sum of these payments greater than, less than, or equal to GDP?

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Definitions:

Overstated

A situation where the reported value or figures are higher than the true or accurate value, often unintentionally.

Cost of Goods Sold

The direct costs attributable to the production of goods sold by a company, including materials and labor.

Average Number

A value found by adding all numbers in a set together and then dividing by the quantity of numbers in that set.

Inventory

The unfinished materials, items in production, and completed products that form part of a company's assets, which are available for sale or will soon be.