The Two Basic Markets Shown by the Simple Circular Flow

question 50

Multiple Choice

The two basic markets shown by the simple circular flow model are:

• A)capital goods and consumer goods.
• B)free and controlled.
• C)product and factor.
• D)household and business.

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Definitions:

Yields

Yields refer to the earnings generated and realized on an investment over a particular period, expressed as a percentage based on the investment’s cost, its current market value, or its face value.

Debentures

A type of debt instrument not secured by physical assets or collateral but based on the creditworthiness and reputation of the issuer.

Mortgage Bonds

Bonds secured by the pledge of specific assets, usually real estate properties, as collateral for the debt.

Yield to Maturity

The total return expected on a bond if held until its maturity date.