Which of the Following Is FALSE About the Circular-Flow Diagram

question 118

Multiple Choice

Which of the following is FALSE about the circular-flow diagram?

• A)Households are the primary demanders of goods and services.
• B)Firms are the primary suppliers of goods and services.
• C)Money flows from households to firms as households offer factors of production for sale.
• D)Money flows in the direction opposite to goods and services and factors of production.

Analyze the characteristics and outcomes of pure monopoly versus competitive markets.

Recognize the impact of monopolist pricing strategies, including nondiscriminating and price discrimination methods.

Interpret revenue curves and their relevance to monopolistic pricing and output decisions.

Assess the role of barriers to entry in maintaining monopoly power.

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Definitions:

Coupon Bonds

Bonds that pay the holder a fixed interest payment (coupon) periodically until the maturity date, at which point the principal is repaid.

Rate of Return

The increase or decrease in an investment's value within a specific time frame, represented as a percent of the investment's original price.

Market Rate of Interest

The prevailing rate at which interest is paid by borrowers for loans or earned by investors for deposit accounts, typically influenced by the supply and demand for money in the economy.

Semiannually

Occurring or calculated twice a year, typically used in the context of bond interest payments or other financial assessments.