In the Circular-Flow Diagram

question 56

Multiple Choice

In the circular-flow diagram,

• A)profit flows from households to firms.
• B)labor flows from households to firms.
• C)services flow from households to firms.
• D)All of the above are correct.

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Definitions:

Compensation Tax

Taxes applied on income, especially income generated from work or compensation for services.

Labor Department

A government body responsible for overseeing employment laws, workplace safety, and labor statistics.

Unemployment Insurance

A government-provided insurance that offers temporary financial assistance to workers who have lost their jobs through no fault of their own.

Vacation Leave

A period of time an employee is allowed to be away from work for personal reasons, travel, or rest, usually while still being paid.