In the Circular-Flow Diagram

question 224

Multiple Choice

In the circular-flow diagram,

• A)factors of production flow from government to firms.
• B)goods and services flow from households to firms.
• C)income paid to the factors of production flows from firms to households.
• D)spending on goods and services flows from firms to households.

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Definitions:

Straight-Line

A method of calculating depreciation or amortization by evenly distributing the cost over an asset's useful life.

Double-Declining-Balance

A method of accelerated depreciation where the asset's book value is decreased at double the rate of straight-line depreciation.

Units-Of-Activity

A depreciation method that allocates expense based on the actual usage or activity level of the asset.

Depreciation Method

A systematic approach used to allocate the cost of a tangible asset over its useful life, such as straight-line or declining balance methods.