Question
In: Economics
In a circular flow? diagram, ????? i) the value of production? = income ???? ii) the...
In a circular flow? diagram,
????? i) the value of production? = income
???? ii) the value of production? = expenditure
??? iii) expenditure? = income
A.
only i is a true statement.
B.
i and iii are true statements.
C.
?i, ii and iii are true statements.
D.
only iii is a true statement.
E.
i and ii are true statements.
Solutions
Expert Solution
The answer is C
C.
?i, ii and iii are true statements.
In a circular flow diagram total expenditure must be equal to the total income.The households earn income from the factor market in form of wages from the firm.The firm earns payment from households in the goods market.All leakages must equal all injections.
Rahul Sunny answered 1 year agoRelated Solutions
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economy. The outer set of arrows (shown in green) shows the flow of
dollars, and the inner set of arrows (shown in red) shows the
corresponding flow of inputs and outputs.
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economy. The outer set of arrows (shown in green) shows the flow of
dollars, and the inner set of arrows (shown in red) shows the
corresponding flow of inputs and outputs.
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