The Circular Flow Model Shows the Flow of

question 139

Multiple Choice

The circular flow model shows the flow of

• A)goods markets and factor markets as they move through the economy.
• B)only funds in stock and bond markets.
• C)expenditure and income throughout the economy.
• D)only money throughout the economy.
• E)only tax payments and government expenditures.

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Definitions:

Depreciation Expense

This is an accounting method used to allocate the cost of a tangible asset over its useful life.

Salaries and Wages Expense

The total cost incurred by an employer for employee compensation, including both salaries and hourly wages.

Temporary Account

An account that is closed at the end of each accounting period and its balances transferred to permanent accounts; examples include revenues, expenses, and dividends accounts.

Correct Entry

An accurate recording of a transaction in the books of accounts, adhering to accounting principles and conventions.