Because every transaction has a buyer and a seller,
A)GDP is more closely associated with an economy's income than it is with an economy's expenditure.
B)every transaction contributes equally to an economy's income and to its expenditure.
C)the number of firms must be equal to the number of households in a simple circular-flow diagram.
D)firms' profits are necessarily zero in a simple circular-flow diagram.

Question

Quizplus · Accepted Answer

Every transaction in an economy involves a payment for a good or service, which is an expenditure for the buyer and income for the seller, making income and expenditure two sides of the same economic activity.

Because Every Transaction Has a Buyer and a Seller