The Circular Flow Model Shows That Goods and Services Flow

question 10

Multiple Choice

The circular flow model shows that goods and services flow from

• A) businesses to households.
• B) households to business.
• C) the factor market to businesses.
• D) the goods market to businesses.
• E) the factor markets to the goods markets.

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Definitions:

Accounts Receivable

Money owed to a business by its customers for goods or services delivered or used but not yet paid for.

Short-Term Notes Receivables

Short-duration financial assets representing amounts owed to a company that must be paid within a year.

Allowance Account

An accounting practice used to create a buffer for potential future losses on receivables, also known as a provision for doubtful debts.

Gross Realizable Value

The estimated selling price of goods minus any costs associated with the completion and sale of those goods.