The Circular-Flow Diagram Is a Type of Simple Model That

question 50

Multiple Choice

The circular-flow diagram is a type of simple model that:

• A)illustrates the carbon-cycle in forestry economic models
• B)illustrates how an economy is organised between key sectors
• C)shows how fish stocks grow and replenish from harvest
• D)shows the money flows that are managed by the banking system

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Definitions:

Distribution Of Rights

The allocation of legal entitlements and responsibilities among individuals, organizations, or governments.

Efficient Outcome

An economic situation in which every resource is optimally allocated to serve each individual or entity in the best way while minimizing waste and inefficiency.

Government Intervention

Actions taken by a government to affect the economy, which can include regulation, subsidies, tariffs, and other mechanisms.

Externalities

Economic side effects or consequences of an industrial or commercial activity that affect other parties without being reflected in the costs of the goods or services involved.