The Two Basic Markets Shown by the Simple Circular Flow

question 16

Multiple Choice

The two basic markets shown by the simple circular flow model are

• A)capital goods and consumer goods.
• B)competitive and regulated.
• C)product and resource.
• D)household and business.

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Definitions:

Income Tax Rate

The percentage at which an individual or corporation is taxed on their income.

Income Tax Expense

Income tax expense represents the amount of money a company or individual owes to the government based on their taxable income.

Deferred Tax Liability

A tax obligation that a company owes in the future due to temporary differences between its taxable income and its accounting earnings.

Deferred Tax Asset

An accounting item on the balance sheet that represents a future tax payment obligation to the IRS, which results in reduced taxes payable in future periods.