The Simplest Circular-Flow Model Shows the Interaction Between Households and Firms.In

question 87

Multiple Choice

The simplest circular-flow model shows the interaction between households and firms.In this model:

• A)only barter transactions take place.
• B)households and firms interact in the market for goods and services,but firms are the only participants in the factor markets.
• C)firms supply goods and services to households,which in turn supply factors of production to firms.
• D)attention is focused on real flows of goods,services,and factors of production,but money flows between households and firms are ignored for simplicity.

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Definitions:

Profit Center

A profit center is a segment or area of a business that is responsible for generating its own revenues and hence directly contributes to the company's overall profit.

Indirect Expenses

Costs that are not directly attributable to a specific product or service but are necessary for the operation of a business, such as utilities or rent.

Gross Profit Ratio

Gross profit ratio is a financial metric that represents the proportion of money left over from revenues after accounting for the cost of goods sold.

Wage Expenses

The total cost incurred by a company for the payment of wages to its employees.