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In a Simple Circular-Flow Diagram, How Are Total Income and Total

Question 1

Multiple Choice

In a simple circular-flow diagram, how are total income and total expenditure interrelated?


A) They are seldom equal because of fluctuations in the business cycle that occur in an economy.
B) They are equal only when all goods and services produced are sold.
C) They are always equal because every transaction has a buyer and a seller.
D) They are always equal because of accounting rules.

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