The circular-flow diagram is important because it shows that the flow of money into each market or sector of the economy is _____ the flow of money coming out of that sector.
A) greater than
B) equal to
C) less than
D) unrelated to

Question

Quizplus · Accepted Answer

The circular-flow diagram is based on the principle of conservation of mass. Therefore, the total flow of money into the economy must be the same as the total flow of money out of the economy. This means that the flow of money into each market or sector must be equal to the flow of money coming out of that sector. Thus, the correct answer is B.

The Circular-Flow Diagram Is Important Because It Shows That the Flow