Exhibit 1.1 -Refer to the Circular-Flow Model in Exhibit 1.1. If B

question 115

Multiple Choice

Exhibit 1.1

-Refer to the circular-flow model in Exhibit 1.1. If B represents resource markets and C represents households, then the flow from B to C is:

• A) revenue.
• B) expenditures.
• C) labor, capital, and natural resources.
• D) income.
• E) wages, interest, rent, and profit.

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Definitions:

Par Value

The face value of a bond or stock, representing the amount that the issuer agrees to pay at maturity, or the nominal value of a share.

Common Stock

A type of equity security that represents ownership in a corporation and entitles holders to vote on company matters.

Book Value Per Share

A company's equity available to common shareholders divided by the number of outstanding shares, indicating the value of a company's shares based on its financial statements.

Net Income

The profit of a company after all expenses and taxes have been subtracted from revenue.