The Circular Flow Shows That Aggregate Spending Is Larger Than

question 8

True/False

The circular flow shows that aggregate spending is larger than aggregate income because people save.

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Definitions:

Market Value

The ongoing cost in the market for an asset or service to be sold or bought.

Investment Cost

The total expenses incurred in purchasing an asset, including the price of the asset plus any additional fees or charges.

Return on Investment

A measure of the profitability of an investment, calculated as the net profit from the investment divided by the initial cost of the investment.

Dividends

Disbursements issued by a company to its shareholders, representing a share of the company's earnings distributed to its stock owners.