Leakages in the Circular Flow Model Are

question 81

Multiple Choice

Leakages in the circular flow model are

• A) caused by people not acting rational.
• B) possible when unemployment exists.
• C) reflected in the vertical long-run aggregate supply curve.
• D) caused by people saving instead of spending.

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Definitions:

Common Equity

The percentage of a corporation's equity held by investors in the form of common shares.

Weighted Average

A calculation that takes into account the varying degrees of importance of the numbers in a data set, giving more weight to some numbers than others.

Free Cash Flow

This refers to the amount of cash a company generates after accounting for cash outflows to support operations and maintain its capital assets. It is an important indicator of financial health.

Price Per Share

The current market value of a company's shares, determined by dividing the total market capitalization of the company by its number of outstanding shares.