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The Outer Loop of the Circular-Flow Diagram Represents the Flows

question 125

Multiple Choice

The outer loop of the circular-flow diagram represents the flows of dollars in the economy.Which of the following does not appear on the outer loop?


Definitions:

Financial Asset

Any asset that is cash, an equity instrument of another entity, a contractual right to receive cash or another financial asset, or a contractual right to exchange financial instruments on potentially favorable terms.

Residual Ownership

The remaining interest or value that shareholders have in a company after all obligations and liabilities have been satisfied.

Legal Claims

Rights to seek redress or enforcement through legal action.

Preferred Stock

A type of equity security that has priority over common stock in the distribution of dividends and upon liquidation.

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