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The Simple Circular Flow Diagram Shows That Economic Aggregates Can

question 244

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The simple circular flow diagram shows that economic aggregates can be calculated either by the _____ flows in the product market or by the _____ flowing to households in the resource market.


Definitions:

Straight-line Method

A method of calculating depreciation of an asset, which spreads the cost evenly over its useful life.

Depreciation Expense

An accounting method that allocates the cost of a tangible asset over its useful life.

Residual Value

The estimated value that an asset will realize upon its sale at the end of its useful life, important in calculating depreciation.

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