Which Actor in the Simplified Circular Flow Model Buys or Rents

question 5

Multiple Choice

Which actor in the simplified circular flow model buys or rents land, labor, and capital?

• A) Firms
• B) Households
• C) Markets for factors of production
• D) Government

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Definitions:

Unissued Stock

Shares that have been authorized by a company's charter but have not been issued or sold to investors.

Shares

Units of ownership interest in a corporation or financial asset, representing an equal proportion of the company's capital.

Book Value

The net value of a company's assets as recorded on its balance sheet, calculated as total assets minus intangible assets and liabilities.

Stock Traded

Refers to shares of a company that are bought and sold in financial markets or exchanges.