In the Circular Flow Diagram, Firms Get Their Ability to Pay

question 44

Multiple Choice

In the circular flow diagram, firms get their ability to pay for the costs of production from the

• A)revenues they receive for their products.
• B)resources they acquire in the resource markets.
• C)incomes they earn for their resources.
• D)goods and services they get in the product markets.

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Definitions:

Business Combinations

Transactions or events in which one entity gains control over one or more other entities, often involving mergers and acquisitions.

Consolidated Income Statement

A financial document that aggregates the financial performance (revenues, expenses, profits) of a parent company and its subsidiaries.

Net Income

The total earnings of a company after all expenses and taxes have been deducted from revenue.

Voting Shares

Shares of stock that grant the holder the right to vote on company matters at shareholders' meetings.