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

Question

Quizplus · Accepted Answer

Business investment refers to the purchases of capital goods, such as machinery or buildings, which helps to expand a business and increase future production. This investment returns purchasing power to the circular flow by creating jobs, increasing income, and generating profits. Retained earnings, depreciation, and profit also contribute to the circular flow, but they do not necessarily involve the purchase of goods or services from other businesses.

Businesses Return Purchasing Power to the Circular Flow in the Form