The Figure Above Shows the Circular Flow Model

question 24

Multiple Choice

The figure above shows the circular flow model.
-Margo orders a MacBook Pro computer from The Apple Store online to use it in her graphic design business.How will this be reflected in the figure above?

• A) as a flow of a factor of production
• B) as a flow of goods and services bought
• C) as expenditures on goods and services
• D) as goods and services supplied
• E) It won't be shown in the figure because this transaction takes place neither in goods markets nor in factor markets.

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Definitions:

Accounts Payable

Short-term liabilities representing the amount a company owes to suppliers or creditors for goods and services received but not yet paid for.

Accounts Receivable

Outstanding payments from customers to a firm for delivered goods or services awaiting payment.

Service Revenue

Represents the income earned by a company from its business activities, such as the sale of services, before any expenses are deducted.

Fair Market Value

The price at which an asset would trade in a competitive auction setting.