In the circular flow model, profits are considered to be
A) a subtraction from the Gross Domestic Product (GDP).
B) a cost of doing business.
C) equal to zero, or else the circular flow would be out of balance.
D) a form of interest payment.

Question

Quizplus · Accepted Answer

Profits are considered to be a cost of doing business in the circular flow model. They represent the difference between total revenue and total costs incurred by a business.

In the Circular Flow Model, Profits Are Considered to Be