The Two Flows, or Things Being Exchanged, in the Circular

question 131

Multiple Choice

The two flows, or things being exchanged, in the circular flow model are:

• A) inputs and outputs.
• B) imports and exports.
• C) inputs/outputs and money.
• D) land and labor.

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Definitions:

Return On Investment

A measure used to evaluate the efficiency or profitability of an investment, calculated by dividing the net profit by the cost of the investment.

Discount Rate

The interest rate charged to commercial banks and other financial institutions for loans received from the central bank or the rate used in discounted cash flow analysis to determine the present value of future cash flows.