According to the circular flow model, the value of the household sector and the value of the business sector will
A) never be the same.
B) always be equal.
C) differ by the amount of the resource market.
D) differ by the amount of the product market.

Question

Quizplus · Accepted Answer

In the circular flow model, the value of the household sector and the value of the business sector are always equal because every transaction in the product market involves both a buyer and a seller. The total value of goods and services produced by businesses equals the total income earned by households, and vice versa. Therefore, the value of the household sector and the business sector are always equal.

According to the Circular Flow Model, the Value of the Household