In the Simple Circular-Flow Diagram, the Participants in the Economy

question 160

Multiple Choice

In the simple circular-flow diagram, the participants in the economy are

• A)firms and government.
• B)households and firms.
• C)households and government.
• D)households, firms, and government.

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Definitions:

Earnings Management

The practice of using accounting techniques to produce financial reports that may mislead stakeholders about a company's financial condition.

Pro Forma Earnings

Pro forma earnings refer to a company's earnings that exclude certain costs or expenses, typically non-recurring items, to provide a clearer picture of its financial performance.

Required Rate of Return

The minimum return that investors expect or require in order to invest in an asset, considering its risk.

Dividends Per Share

The portion of a company's earnings distributed to shareholders, divided by the number of outstanding shares.