Which Markets Are Depicted in the Basic Circular Flow Model

question 59

Multiple Choice

Which markets are depicted in the basic circular flow model?

• A) the goods market and the stock market
• B) the factor market and the bond market
• C) the goods market and the factor market
• D) the money market and the foreign exchange market
• E) the stock market and the bond market

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Definitions:

Fair Market Value

The price at which an asset would sell in the marketplace between a willing buyer and a willing seller, each having reasonable knowledge of the pertinent facts.

Trade-In Allowance

The amount credited to the buyer of a new item for the value of the old item that is being traded in as part of the transaction.

Accumulated Depreciation

The total amount of depreciation expense that has been recorded against a fixed asset since it was acquired.

Gain Or Loss

The financial result that occurs when the selling price of an asset differs from its purchase price.