The Following Question Are Based on the Following Circular Flow

question 4

Multiple Choice

The following question are based on the following circular flow diagram:

-In a simple circular flow model of an economy

• A) households buy factors of production from businesses.
• B) the flow of income to households from businesses is greater than the flow of expenditures by households for goods produced by businesses.
• C) businesses buy final goods and services produced by households.
• D) the total amount of labor hours worked equals the total number of goods produced.
• E) households are owners of resources and purchasers of final goods and services.

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Definitions:

Bonds

Fixed-income investments representing loans made by an investor to a borrower, typically corporate or governmental.

Cash Proceeds

The total amount of cash received from the sale of goods, asset disposals, or financing transactions.

Controlling Investor

An investor or entity that holds a significant amount of voting stock in a company, allowing them to influence or control management decisions.

Long-Term Investment

Investments that a company or individual holds for more than one year, typically including stocks, bonds, or real estate.