All of the Following Are Examples of Spending on Factors

question 178

Multiple Choice

All of the following are examples of spending on factors of production in the circular flow model except

• A)Bima hires two students to work at his ice-cream store.
• B)"Get Fit Together" purchases 3 new treadmills for its gym.
• C)Iris buys a dozen roses for her mother's birthday.
• D)The Banyan Tree rents a much larger property so that it can add a restaurant to its facilities.

---

Definitions:

After-Tax Figure

The amount of money left after all applicable taxes have been subtracted from the gross or total amount.

Taxable Income

The amount of income that is used to calculate how much tax an individual or a company owes to the government.

Retained Earnings

The portion of net income that is not distributed to shareholders as dividends but is kept by the company to be reinvested in its core business or to pay debt.

Capital Budgeting

The process of evaluating and selecting long-term investments that are consistent with the firm's goal of maximizing owner wealth.