In the Circular Flow Model

question 58

Multiple Choice

In the circular flow model,

• A) only firms sell in markets.
• B) only households buy from markets.
• C) some firms only sell and some firms only buy.
• D) the money used to buy goods and the goods themselves travel in the same direction.
• E) both firms and households buy or sell in different markets.

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Definitions:

Quantity Ordered

The specific amount of goods or services requested by a customer or required for a particular purpose or project.

Holding Cost

The expenses associated with storing inventory until it is sold or used, including storage, handling, insurance, and opportunity costs.

Lot Size

The quantity of units produced or purchased in a single batch, which can be optimized to minimize costs and meet demand.

Aggregating

The process of combining multiple pieces of data or information into a single group or total, often used to simplify analysis or reporting.