The Circular-Flow Diagram Explains, in General Terms, How the Economy

question 145

True/False

The circular-flow diagram explains, in general terms, how the economy is organized and how participants in the economy interact with one another.

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Definitions:

Consumer Surplus

The difference between what consumers are willing to pay for a good or service versus what they actually pay.

Producer Surplus

The difference between what producers are willing to accept for a good versus what they actually receive, indicating economic benefit.

Export Sector

The segment of an economy's industry involved in producing goods or services for sale in foreign countries.

Consumer Surplus

The difference between the maximum price consumers are willing to pay and the market price they actually pay.