The Portion of the Circular Flow Model Which Shows the Flow

question 33

Multiple Choice

The portion of the circular flow model which shows the flow of funds from savers to borrowers is the:

• A) product market.
• B) factor market.
• C) savings market.
• D) financial market.

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Definitions:

LIFO Inventory

An inventory valuation method (Last In, First Out) where the most recently produced or acquired items are recorded as sold first.

Cost of Goods Sold

The direct costs attributable to the production of the goods sold by a company, including direct materials and labor costs.

Perpetual Inventory System

An inventory management system where updates to inventory records are made immediately following each transaction, giving a continuous, real-time account of stock levels.

Average Cost Method

An inventory costing method where the cost of goods sold and ending inventory is determined by averaging the cost of all similar items available.