The Circular Flow Diagram Shows That

question 178

Multiple Choice

The circular flow diagram shows that

• A)the value of total income is equal to the total value of expenditures on final goods and services.
• B)firms pay households wages, and households receive transfer payments from firms.
• C)households spend all their income on goods and services.
• D)GDP will be less than the total value of expenditures on final goods and services in the economy.
• E)firms own all factors of production.

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Definitions:

Persuasion

The process of convincing someone to do or believe something through reasoning or the use of symbols.

Nonspecific Compensation

A term not widely recognized; could imply a form of compensation not tied to specific performance criteria or achievements.

Bridging

A conflict resolution technique that involves finding a new option or idea that all parties can agree with, thereby bridging their differences.

Invent

To create or design something that has not existed before; to innovate.