The Main Idea of a Circular Flow Diagram Is That

question 67

True/False

The main idea of a circular flow diagram is that every dollar spent in an economy becomes a dollar of income to someone else.

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Definitions:

Income From Operations

The profit realized from a business's operational activities.

Single-Step Statement

An income statement format that sums up all revenues and subtracts all expenses together in a single step to compute the net income.

Multiple-Step Form

An income statement format that separates operating revenues and expenses from non-operating ones, highlighting multiple levels of income and expense details.

Calculating Ratios

The process of determining the relationship between two or more financial figures, used to assess the financial health, performance, and efficiency of an entity.