Figure 2-2 -Refer to Figure 2-2.If the Flow of Goods and Services

question 249

Multiple Choice

Figure 2-2
-Refer to Figure 2-2.If the flow of goods and services is part of what is represented by the inner loop of this circular-flow diagram,then

• A)the flow of factors of production is also part of what is represented by the inner loop.
• B)the flow of income paid to households is also part of what is represented by the inner loop.
• C)the flow of revenue to firms is also part of what is represented by the inner loop.
• D)households must be sellers of output.

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Definitions:

Investing Activities

Part of a company's cash flow statement that shows the amount of money spent or generated from various investment-related activities in a specific time period.

Financing Activities

Transactions involving issuing debt, equity, and paying dividends as reflected in a company's cash flow statement, indicating the flow of cash between a company and its owners and creditors.

Statement of Cash Flows

A document that illustrates the influence of balance sheet modifications and revenue on the availability of cash and equivalents, categorized by activities related to operating, investing, and financing.

Par Value

The face value of a bond or stock as stated by the issuing company, often used as an accounting standard or a minimum value.