Use the Following to Answer Questions

question 66

Multiple Choice

Use the following to answer questions .
Exhibit: The Circular Flow for the United States
-(Exhibit: The Circular Flow for the United States) The purchase of a new tractor by Farmer Brown is:

• A) classified as gross private investment and the flow is represented by 5.
• B) classified as gross private investment and the flow is represented by 2.
• C) classified as consumption and the flow is represented by 5.
• D) classified as consumption and the flow is represented by 1.

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Definitions:

Selling and Administrative Expense

Expenses related to the selling of products and the management of the business, not directly tied to production, including marketing, salaries of executives, and office supplies.

Adjusted

Modified or changed for a more accurate comparison or calculation, often in financial contexts.

Financing Activities

Transactions involving changes in equity and borrowings of the company, reported in the cash flow statement.

Net Cash

The difference between a company's total cash inflows and outflows over a specific period.