In the Circular Flow Diagram, Firms Receive Revenue from the _____

question 50

Multiple Choice

In the circular flow diagram, firms receive revenue from the _____ market, which is used to purchase inputs in the _____ market.

• A) goods; financial
• B) factor; financial
• C) goods; factor
• D) factor; goods

Comprehend the primary focus of the open-economy macroeconomic model, including the determination of GDP and the price level.

Recognize the connection between net capital outflow and the supply of dollars in the foreign-currency exchange market.

Analyze the effects of changes in national saving, government deficits, and real interest rates on the open-economy macroeconomic model.

Examine the impact of international trade and trade restrictions on net exports, the real exchange rate, and the demand for dollars in the foreign-currency exchange market.

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Definitions:

Common Stock

Represents equity ownership in a corporation, with holders possibly entitled to vote on corporate policy and receive dividends.

Dividends

Payments made by a corporation to its shareholder members, distributed from the company's profits.

Expenses

Costs incurred in the operation of a business which may include costs such as rent, utilities, payroll, and materials.

Revenues

The sum of money made through the sale of goods or services, which constitute the primary operations of a corporation.