Which of the Following Statements Is False? in the Circular

question 14

Multiple Choice

Which of the following statements is false? In the circular flow model:

• A)the funds needed to finance investment spending come from the saving of households.
• B)GDP can be measured either by the income received or by the expenditures made.
• C)factor payments are made to business firms.
• D)consumption expenditures are made by households.

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Definitions:

Financial Analysis

The evaluation of a company's financial statements to determine its performance and make future predictions, often involving ratio and trend analysis.

Return

The gain or loss generated on an investment over a particular period, expressed as a percentage of the investment’s initial cost.

Internal Rate

An internal rate of return (IRR) is a metric used in capital budgeting to estimate the profitability of potential investments.

Independent Project

A project undertaken by an entity or individual that operates independently of other concurrent initiatives, not impacting or influenced by them.