In a Simple Circular-Flow Diagram

question 9

Multiple Choice

In a simple circular-flow diagram,

• A)households spend all of their income.
• B)all goods and services are bought by households.
• C)expenditures flow through the markets for goods and services,while income flows through the markets for the factors of production.
• D)All of the above are correct.

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Definitions:

Inventions

Original creations or discoveries that offer new technical solutions or enhance existing ones.

Innovations

The process of translating an idea or invention into goods or services that create value or for which customers will pay.

Patented

A legal status provided to an inventor or assignee granting exclusive rights to use, make, and sell an invention for a certain period of time.

Marginal Benefit

The increase in satisfaction or utility one gets from the consumption of an additional unit of any good or service.