Figure 2-2 -Refer to Figure 2-2.The Figure Represents a Circular-Flow Diagram.If the a Circular-Flow

question 16

Multiple Choice

Figure 2-2

-Refer to Figure 2-2.The figure represents a circular-flow diagram.If the flow of goods and services is part of what is represented by the inner loop,then

• A)the flow of factors of production is also part of what is represented by the inner loop.
• B)the flow of income paid to households is also part of what is represented by the inner loop.
• C)Box C must represent households and Box D must represent firms.
• D)households must be sellers of output.

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Definitions:

Competitive Market

A market structure characterized by many buyers and sellers, free entry and exit, and a product for which each unit is identical to every other unit.

Coconuts

Tropical fruits or nuts known for their water, milk, oil, and meat, and often used as examples in economic models.

Fish

Aquatic vertebrates that are typically covered with scales and equipped with fins for swimming.

Workbook Problems

Exercises or tasks within a workbook designed to practice or test knowledge on a specific subject.