According to the Circular Flow Model, Product Markets Are Where

question 67

Multiple Choice

According to the circular flow model, product markets are where

• A)households earn their money incomes.
• B)households acquire economic resources from businesses.
• C)businesses acquire their inputs from households.
• D)businesses earn their revenues from households.

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Definitions:

Sales Returns & Allowances

Transactions where sellers accept returned goods from buyers, or provide a price reduction or discount, reducing the initial sales revenue.

Income Statement

A financial statement that reports a company's financial performance over a specific accounting period, detailing revenues, expenses, and net income or loss.

Perpetual Inventory Method

An inventory accounting method where updates to the inventory records are made immediately following each sale or purchase.

Sales Returns and Allowances

A reduction in sales revenue that occurs when customers return goods or receive allowances for unsatisfactory goods, impacting the net sales figure.