In the Simple Circular-Flow Diagram

question 184

Multiple Choice

In the simple circular-flow diagram,

• A)households own the factors of production.
• B)households buy all the goods and services that firms produce.
• C)land,labor,and capital flow from households to firms.
• D)All of the above are correct.

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Definitions:

Bonds

Fixed income investments where an investor loans money to an entity which borrows the funds for a defined period at a variable or fixed interest rate.

Money Markets

Sections of the financial market where short-term financial instruments and securities are traded, helping firms and governments manage liquidity.

Capital Markets

Financial markets where long-term debt or equity-backed securities are bought and sold, providing businesses and governments with a platform to raise funds.

Corporate Debt

Borrowed money that a company owes to creditors, which can be in the form of bonds, loans, or other debt instruments.