In the Circular-Flow Diagram

question 248

Multiple Choice

In the circular-flow diagram,

• A)taxes flow from households to firms,and transfer payments flow from firms to households.
• B)income payments flow from firms to households,and sales revenue flows from households to firms.
• C)resources flow from firms to households,and goods and services flow from households to firms.
• D)inputs and outputs flow in the same direction as the flow of dollars,from firms to households.

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Definitions:

Warranties

Legally binding promises made by a manufacturer or seller that a product or service meets certain quality and reliability standards or that certain repair or replacement conditions will be met.

Unaccepted Draft

A written order to pay a specified amount that has not been agreed to or signed by the party expected to pay.

Entitled To Enforce

A legal phrase indicating that a person or entity has the right to enforce a contract or legal instrument.

Promissory Note

A promissory note is a financial instrument in which one party (the issuer) promises in writing to pay a determinable sum of money to the other (the payee), either at a fixed or determinable future time or on demand of the payee, under specific terms.