A Circular Flow Diagram That Includes the Government and the Foreign

question 47

Multiple Choice

A circular flow diagram that includes the government and the foreign sector shows that the role of the Canadian government is

• A) only to provide services to households and firms.
• B) only to collect net taxes from households and firms.
• C) only to purchase goods and services.
• D) both to provide services and to collect net taxes from households and firms.
• E) to provide services to,and collect net taxes from,households and firms,and to purchase goods and services.

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Definitions:

Accounts Payable

Amounts owed by a company to suppliers or vendors for goods or services received but not yet paid for, recognized as a current liability on the balance sheet.

General Journal

A primary accounting record where financial transactions are entered before posting to ledger accounts.

General Ledger

The primary accounting record of a business which contains all the balance sheet and income statement accounts.

Trial Balance

A bookkeeping worksheet where the balances of all ledgers are compiled into debit and credit account column totals that are equal.