In a Simple Circular-Flow Diagram

question 9

Multiple Choice

In a simple circular-flow diagram,

• A)households spend all of their income.
• B)all goods and services are bought by households.
• C)expenditures flow through the markets for goods and services,while income flows through the markets for the factors of production.
• D)All of the above are correct.

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Definitions:

Transfer Price

The rate assigned to commodities or services moved between branches or associated companies of the same entity.

Valve Division

A specialized unit within a company focused on the production and distribution of valves.

Variable Expenses

Costs that change in proportion to the level of goods or services a business produces.

Transfer Price

The amount at which commodities and services are dealt among subdivisions within the same business entity.