Which of the Following Are Represented by the Same Flow

question 13

Multiple Choice

Which of the following are represented by the same flow in the circular flow model?

• A)the flow of goods and the flow of factors of production
• B)the flow of costs and the flow of revenue
• C)the flow of income earned from the sale of resources and the flow of expenditures on goods and services
• D)the flow of income received by households and the flow of tax revenues paid by firms

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Definitions:

Profits

The financial gains that remain after subtracting all expenses from revenue, indicating the financial success of a business.

Operating Leverage

A measure of how sensitive a company's operating income is to a change in its sales volume, indicating the degree to which fixed costs are used in production.

Profits

The financial gain obtained when revenues generated from business activities exceed the expenses, costs, and taxes needed to sustain them.

Demand-Side Economics

An economic theory focused on increasing demand for goods and services as a pathway to economic growth and full employment.