In the Circular Flow Model, in What Forms Do Households

question 125

Multiple Choice

In the circular flow model, in what forms do households receive income?

• A) wages, rent, interest, and profits
• B) wages and rent while firms receive interest and profits
• C) wages, rent, and interest while firms receive profits
• D) wages while firms receive rent, interest, and profits

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Definitions:

Common-size Statement

A financial statement in which each line item is expressed as a percentage of a significant total, facilitating comparison with other companies or periods.

Percentage of Sales

A financial ratio that compares a company’s various expenses, investments, or profits as a percentage of total sales.

Greatest Use of Funds

The most efficient or impactful way in which an organization chooses to allocate and use its financial resources.

Accounts Receivable

Refers to the money owed to a company by its customers for goods or services already delivered but not yet paid for.