Businesses return purchasing power to the circular flow in the form of

Question

Quizplus · Accepted Answer

Businesses return purchasing power to the circular flow through business investment, which refers to the purchase of new capital goods or the expansion of existing ones. Retained earnings and profit are part of a business's income and are not necessarily returned to the circular flow. Depreciation is the reduction in the value of assets over time and does not involve the return of purchasing power to the circular flow.

Businesses Return Purchasing Power to the Circular Flow in the Form