The Circular Flow Diagram Shows Only the Aggregate Expenditures Measure

question 203

True/False

The circular flow diagram shows only the aggregate expenditures measure of GDP.

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Definitions:

Lowest Output

The minimum amount of goods or services produced by an entity under given conditions.

Shut Down

A short-term decision by a firm to cease operations because current operation is not covering variable costs.

Firm

An organization that produces goods or provides services, usually with the aim of making a profit.

Economic Profit

The difference between the total revenue generated by a business and the total costs, including both explicit and implicit costs.