A Circular Flow Diagram That Includes the Government and the Foreign

question 162

Multiple Choice

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

• A) only to produce and sell goods and services.
• B) only to hire labour.
• C) only to pay with net taxes for services from the government.
• D) both to produce and sell goods and services,and to hire labour.
• E) to produce and sell goods and services,to hire labour,and to pay with net taxes for services from the government.

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Definitions:

Manufacturing Equipment

Machines and tools used in the process of producing goods.

Direct Materials

Direct materials are raw materials that can be directly attributed to the production of goods.

Product Costs

Product costs are the expenses directly associated with the production of goods, including raw materials, labor, and manufacturing overhead.

Income Statement

A financial statement that shows a company's revenues, expenses, and profits over a specific period.