In the Circular Flow Model, the Factor Markets Are the Markets

question 14

Multiple Choice

In the circular flow model, the factor markets are the markets in which

• A) government goods and services are provided.
• B) land, labour, capital and entrepreneurship are bought and sold.
• C) governments impose all their taxes.
• D) investment goods and services are bought and sold.
• E) consumption goods and services are bought and sold.

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Definitions:

Debt-To-Equity Ratio

A financial ratio indicating the relative proportion of shareholders' equity and debt used to finance a company's assets.

Times Interest Earned

A financial ratio that measures a company's ability to meet its debt obligations by comparing its earnings before interest and taxes (EBIT) to its interest expenses.

Gross Margin Percentage

The portion of sales revenue that exceeds the cost of goods sold, expressed as a percentage, indicating the financial health of product sales.

Net Profit Margin Percentage

A financial metric that shows the percentage of revenue remaining after all operating expenses, interest, taxes, and preferred stock dividends have been deducted from total sales.