In a Simple Circular Flow Diagram, Total Spending on Goods

question 247

Multiple Choice

In a simple circular flow diagram, total spending on goods and services in the product market

• A) is greater than the total income earned in the resource market.
• B) is less than the total income earned in the resource market.
• C) is done by the government.
• D) equals the total income earned in the resource market.

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Definitions:

Reorder Period

The time interval between placing orders for supplies or inventory to replenish stock.

Lead Time

The total time that elapses between the initiation and completion of a process, such as the period from placing an order to delivery of a product.

Re-Order Point

The reorder point is the level of inventory that triggers an action to replenish that particular inventory stock, ensuring a seamless operation without stockouts.

Demand

The total quantity of a good or service that consumers are willing and able to purchase at a given price level at a given time.