In a Simple Circular Flow Diagram, Total Spending on Goods

question 247

Multiple Choice

In a simple circular flow diagram, total spending on goods and services in the product market

• A) is greater than the total income earned in the resource market.
• B) is less than the total income earned in the resource market.
• C) is done by the government.
• D) equals the total income earned in the resource market.

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Definitions:

Fair Value

The capital retrieved from trading an asset or the expenditure for reallocating a liability in a well-arranged market transaction at the point of assessing value.

Carry Value

The original purchase cost of an asset adjusted for depreciation, amortization, or impairment costs on the financial statements.

Joint Operation

A business arrangement where two or more parties share control and management of a project or business.

Joint Venture

A business arrangement where two or more parties agree to pool their resources for the purpose of accomplishing a specific task or business activity.