In the classical version of the circular flow of economic life, all savings are done by
A) households.
B) households and businesses.
C) only businesses.
D) government, businesses, and households.

Question

Quizplus · Accepted Answer

In the classical version of the circular flow of economic life, all savings are done by households. This is because households are the primary income earners who save a part of their income for future expenses or investments. Businesses also save money, but they typically do so for operational purposes, such as expanding the business or investing in new equipment. Government savings are uncommon as most governments have high levels of debt and generally do not generate profits.

In the Classical Version of the Circular Flow of Economic