In the Circular Flow Model, Producers

question 51

Multiple Choice

In the circular flow model, producers

• A)sell goods and services in the input market.
• B)and households spend earnings from resource sales on goods and services in the factor market.
• C)hire resources sold by households in the factor market.
• D)spend earnings from resource sales on goods and services in the product market.

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Definitions:

Accrued Interest

Interest that has been incurred but not yet paid or received in cash.

Adjusting Entry

An accounting record made to adjust income or expenditure in accounts to reflect the accrual basis of accounting properly.

Stockholders' Equity

The ownership claim on a corporation's assets that remains after all liabilities are accounted for, denoting shareholder interest.