In the circular flow model,the value of total income for an economy ________ the value of total production.
A)equals
B)is greater than
C)is less than
D)may be greater than or less than

Question

Quizplus · Accepted Answer

In the circular flow model, total income and total production are equal because every dollar spent by one sector of the economy becomes income for another sector. This means that the total value of output produced by firms is equal to the total value of income earned by households. Therefore, the value of total income for an economy equals the value of total production.

In the Circular Flow Model,the Value of Total Income for an Economy