Which Markets Are Depicted in the Basic Circular Flow Model

question 59

Multiple Choice

Which markets are depicted in the basic circular flow model?

• A) the goods market and the stock market
• B) the factor market and the bond market
• C) the goods market and the factor market
• D) the money market and the foreign exchange market
• E) the stock market and the bond market

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Definitions:

Dropping Product

The decision made by a company to discontinue producing and selling a specific product due to factors like poor sales, strategic realignment, or cost inefficiency.

Financial Advantage

Refers to the benefits gained in financial terms, often seen as an edge over competitors or a favorable position in the market.

Special Order

A one-time customer order often involving a large quantity and possibly requiring adjustments to standard pricing or production processes.

Variable Manufacturing Cost

Costs that vary in direct proportion to changes in production volume, such as raw materials and direct labor.