Figure 1-A -Refer to Figure 1-A.In the Circular Flow Diagram, Payments for Diagram

question 106

Multiple Choice

Figure 1-A
-Refer to Figure 1-A.In the circular flow diagram, payments for goods and services:

• A)flow in a clockwise direction.
• B)flow in a counterclockwise direction.
• C)are received by firms in the factor market.
• D)flow in a clockwise direction AND are received by firms in the factor market.
• E)flow in a counterclockwise direction AND are received by firms in the factor market.

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Definitions:

Risky Portfolio

A collection of investments that hold a significant level of risk, aiming for potentially higher returns.

Expected Rate of Return

The anticipated return on an investment, based on the probability of various outcomes, including both risky and risk-free returns.

Standard Deviation

A statistic that measures the dispersion or variability of a dataset relative to its mean, often used in finance to gauge investment risk.

Risky Asset

An investment that holds a significant chance of losing some or all of its value, offering the potential for higher returns to compensate for higher risk.