Households Are Vital to the Circular Flow Model in What

question 91

Multiple Choice

Households are vital to the circular flow model in what two ways?

• A) They supply factors of production and purchase goods and services.
• B) They export goods and services and import goods and services.
• C) They vote for political officers and pay taxes.
• D) They facilitate exchange between consumers and firms.

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Definitions:

Target Profit

The profit a company aims to achieve for a specific period.

Unit Sales

The quantity of items sold by a company during a specific period, not accounting for returns or refunds.

Break-Even Sales

The amount of revenue required to cover both the variable and fixed costs of a business, resulting in neither profit nor loss.

Margin Of Safety

The difference between actual sales and sales at the break-even point, providing a cushion that measures the business's ability to withstand sales fluctuations.