The Circular Flow Diagram of Economic Activity Is a Model

question 8

Multiple Choice

The circular flow diagram of economic activity is a model of the:

• A) flow of goods, services, and payments between households and firms.
• B) influence of government on business behaviour.
• C) role of unions and government in the economy.
• D) interaction among taxes, prices, and profits.

---

Definitions:

401k Retirement Accounts

Tax-advantaged retirement savings accounts offered by employers, allowing employees to save and invest a portion of their paycheck before taxes are taken out.

Enron Corp.

An American energy company based in Houston, Texas, that famously collapsed in 2001 due to widespread corporate fraud and corruption.

Diversified

A strategy that involves spreading investments across various financial assets, industries, or other categories to reduce risk.

Market Risk

The risk of losses in investments due to factors that affect the overall performance of the financial markets.