Which of the Following Statements About the Circular Flow Diagram

question 239

Multiple Choice

Which of the following statements about the circular flow diagram is not correct?

• A)Households receive income from the resource market;they save some of it and spend the rest of it on domestic or foreign goods and services.
• B)The loanable funds market takes net household savings and channels it in part to the government and in part to businesses for investment.
• C)Expenditures on GDP are equal to consumption plus government purchases plus investment plus net exports (exports minus imports).
• D)The net inflow of capital from foreign economies must always be positive and equal to the amount of business investment.

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Definitions:

Referent Power

A form of power that stems from being admired or respected, leading others to identify with the person who has referent power.

Identification

Conformity to a social norm prompted by perceptions that those who promote the norm are attractive or similar to oneself.

Job

A role or position that involves a set of tasks and responsibilities, typically in exchange for compensation.

Legitimate Power

Legitimate power is the authority granted to individuals in managerial or leadership positions, based on their role within the organization, which allows them to influence others' behaviors and decisions.