In the Circular-Flow Model, Firms Demand All of the Following

question 162

Multiple Choice

In the circular-flow model, firms demand all of the following except:

• A) labor.
• B) goods and services.
• C) capital.
• D) entrepreneurial ability.
• E) natural resources.

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Definitions:

Net Present Value Method

A method used in capital budgeting to evaluate the profitability of an investment or project by calculating the present value of its expected cash flows minus the initial investment.

Cost Savings

The reduction in expenses achieved by improving efficiency, productivity, or reducing waste, often without compromising quality or performance.

Acquisition Cost

The total cost that a company recognizes on its financial statements for acquiring an asset or taking over another business.

Time Value of Money

The principle that a certain amount of money today is worth more than the same amount in the future due to its potential earning capacity.