In a Circular-Flow Diagram, Which Flows Are Involved

question 216

Multiple Choice

In a circular-flow diagram, which flows are involved?

• A) Taxes flow from households to firms, and transfer payments flow from firms to households.
• B) Income payments flow from firms to households, and sales revenue flows from households to firms.
• C) Resources flow from firms to households, and goods and services flow from households to firms.
• D) Inputs and outputs flow in the same direction as the flow of dollars, from firms to households.

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Definitions:

Established Decision Rule

A predefined guideline or criterion that assists in the decision-making process, helping to choose among alternatives.

Rational Model

A decision-making model based on logically analyzing all alternatives and choosing the most optimal solution based on predetermined criteria.

Managerial Decision Making

The process by which managers select among available options to make choices that will benefit their organization.

Time Constraints

The limitations on the amount of time available to complete a task or project.