The Circular-Flow Diagram Is a

question 193

Multiple Choice

The circular-flow diagram is a

• A)visual model of the economy.
• B)visual model of the relationships among money,prices,and businesses.
• C)model that shows the effects of government on the economy.
• D)mathematical model of how the economy works.

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Definitions:

Equal Annual

This term refers to an approach or method where amounts or payments are distributed equally across multiple years.

Net Present Value

A method used to evaluate the profitability of an investment by calculating the difference between the present value of cash inflows and outflows over a period of time.

Rate of Return

The increase or decrease in value of an investment for a set duration, shown as a percentage of the original investment amount.

Present Value Factors

The numerical factors used in calculating the present value of future cash flows, based on a specific discount rate and time period.