Author Question: Which of the following is consistent with the circular flow of income? I. Goods and services flow ... (Read 106 times)

luvbio · **on:** Jun 30, 2018

Which of the following is consistent with the circular flow of income?
I. Goods and services flow in one direction.
II. Payments and incomes flow in one direction.
III. Sellers receive less than what buyers spend.

A) I only B) II only C) III only D) Both I and II

Question 2

Which of the following statements is FALSE?

A) Total income is always greater than total output.
B) In the circular flow model, households sell factor services to businesses in return for factor payments.
C) Businesses sell goods and services to households who use their income to pay for them.
D) The value of total income is equal in value to total output because profit is a cost of production.