The Circular-Flow Diagram

question 85

Multiple Choice

The circular-flow diagram

• A)is an economic model.
• B)incorporates two types of decision makers: households and firms.
• C)represents the flows of inputs,outputs,and dollars.
• D)All of the above are correct.

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Definitions:

Other Income

Income derived from activities that are not part of a company’s primary business operations.

Operating Activity

Operating activity involves the primary functions of a business that relate to its provision of goods and services to the market.

Expenses

Assets used up or services consumed in the process of generating revenues.

Retail Business

A business that sells goods or services directly to consumers for personal or household use.