Which of the Following Statements About a Simple Circular Flow

question 183

Multiple Choice

Which of the following statements about a simple circular flow model is false?

• A) Producers are buyers in the factor market and sellers in the product market.
• B) Households are neither buyers nor sellers in the input market.
• C) Producers are buyers in the factor market.
• D) Households are sellers in the product market.

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Definitions:

Accounts Receivable

The money owed to a company by its customers for goods or services that have been delivered or used but not yet paid for.

Sales

Revenues earned by a company from the sale of goods or services before any expenses are deducted.

Accounts Payable

Short-term liabilities representing amounts owed by a business to suppliers or creditors for goods and services received.

Cost of Goods Sold

The immediate expenses related to manufacturing the products a company sells, such as materials and labor.