The Inner Loop of the Circular-Flow Diagram Represents the Flows

question 506

Multiple Choice

The inner loop of the circular-flow diagram represents the flows of inputs and outputs.Which of the following does not appear on the inner loop?

• A) Wages
• B) Land
• C) Capital
• D) Goods and services sold

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Definitions:

Marginal Land

Land that is of poor quality for agriculture and unlikely to produce a profitable yield without significant investment in improvements.

Rents

Payments made for the use of property or land, or in economic theory, the excess returns to a factor of production over its opportunity cost.

Finite

Something that has limits or bounds; having a definite end or duration.

Profit Rate

The ratio of profits generated to the amount of capital or investment, indicative of the financial health and efficiency of an entity.