Which of the following is true regarding the circular flow diagram?
I. ʺAggregate incomeʺ is the flow of income earned by firms.
II. Retained earnings are considered income earned by firms rather than part of householdsʹ income.
III. The government, households, and firms all have transactions in the goods market.
A) III only
B) I and II
C) I and III
D) I only
Correct Answer:
Verified
Q23: The factor market can best be described
Q24: The circular flow diagram shows
A) how nominal
Q25: The circular flow diagram indicates that
A) firms
Q26: In the circular flow of income
A) households
Q27: In computing GDP, it is essential to
A)
Q29: The circular flow shows that the household
Q30: If we compare the four sources of
Q31: In the circular flow model of an
Q32: Compared to the other sources of spending,
Q33: GDP counts only final goods and services
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