The Circular Flow of Income Assumes That

question 211

Multiple Choice

The circular flow of income assumes that

• A) profit is not a cost of production.
• B) the national income accounting approach is not an adequate way to measure the economy's performance.
• C) goods and services flow in one direction and money payments flow in the other.
• D) total income is the sum of the value of intermediate goods and final goods and services.

Recognize the characteristics of population age structure diagrams.

Understand the concept and implications of demographic transition.

Differentiate between developed and developing countries based on demographic indicators.

Analyze the relationship between literacy rates and infant mortality.

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Definitions:

Day-To-Day Basis

Refers to the routine or daily activities and tasks that are performed regularly.

Cost Ratio Formula

A mathematical formula used to determine the costs associated with producing goods or services in relation to the revenue they generate.

Total Expenses

The sum of all expenditures incurred by an individual or organization, including operational, capital, and other miscellaneous costs.

Petty Cash

A small amount of cash kept on hand for minor, immediate expenses.