In a Simple Circular Flow Diagram,who Supplies Factors of Production

question 97

Essay

In a simple circular flow diagram,who supplies factors of production in markets and who buys these factors of production? Who supplies goods and services in markets and who buys these goods and services?

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Definitions:

Straight-line Method

A depreciation method that allocates an equal amount of depreciation each year over the useful life of an asset.

Depreciable Assets

Assets whose cost is allocated over their useful lives due to usage, wear and tear, or obsolescence.

Annual Depreciation

The portion of an asset's cost that is allocated as an expense each year over its useful life through the process of depreciation.

Salvage Values

Salvage Values represent the estimated residual value of an asset after its useful life has ended and it has been fully depreciated.