The Circular Flow Model Shows the

question 184

Multiple Choice

The circular flow model shows the

• A) distribution of income and consumption goods across income levels.
• B) combinations of the factors of production needed to produce goods and services.
• C) flow of expenditure and incomes that arise from the households', firms', and governments' decisions.
• D) flow of natural resources from firms to the private market to government and back to firms.
• E) distribution of income to the different factors of production.

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Definitions:

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Comprehensive frameworks of laws, regulations, institutions, and procedures that guide the administration of justice in a country or region.

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An agreement between three or more countries to reduce trade barriers and tariffs to encourage trade and economic cooperation among them.

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Taxes imposed on imported goods, typically to protect domestic industries or to raise government revenue.