The Simple Circular Flow Model Shows That

question 78

Multiple Choice

The simple circular flow model shows that

• A)households are on the demand side of both the product and resource market
• B)firms are on the demand side of both the product and resource market
• C)households are on the supply side of the resource market and the demand side of the product market
• D)firms and governments are on the supply side of the loanable funds market
• E)governments are on the demand side of the product market and the supply side of the resource market

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Definitions:

Misrepresentation

The assertion of a fact that is not in accord with the truth. A contract can be rescinded on the ground of misrepresentation when the assertion relates to a material fact or is made fraudulently and the other party actually and justifiably relies on the assertion.

Material Fact

A fact that is significant or essential to the issue or matter at hand, and if known, could influence an individual's decision in a transaction, contract, or legal case.

Reliance

The act of depending or counting on something or someone; in legal contexts, it often refers to actions taken based on the trust in a promise or statement by another party.

Good Faith

An honest intention to act without taking an unfair advantage over another party, often a principle in contract law.