Statement I.The circular flow model traces the flow of money,resources,and goods and services through the economy.
Statement II.Most household income is spent on investment or capital goods.

Question

Quizplus · Accepted Answer

Statement I is true as the circular flow model indeed traces the flow of money, resources, and goods and services through the economy. However, statement II is false as most household income is typically spent on consumption goods and services, rather than investment or capital goods.