In the Circular Flow Model, Money Flows from the Business

question 114

Multiple Choice

In the circular flow model, money flows from the business sector to the household sector through the:

• A) product market.
• B) capital market.
• C) goods market.
• D) services market.
• E) resource market.

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Definitions:

Tax Exempt

Income or transactions that are free from tax at the federal, state, or local level.

Gain/Loss

The financial result that occurs when the selling price of an asset is higher or lower than its purchase price.

Straight Line Basis

A method of calculating depreciation and amortization that allocates an equal portion of an asset's cost to each period in its useful life.

Salvage Value

The estimated value that an asset will realize upon its sale at the end of its useful life.