In the circular flow diagram,the value of all the income in the economy is greater than the value of goods and services produced in the economy.

Question

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The value of all the income in the economy is equal to the value of goods and services produced in the economy in the circular flow diagram. This is because all payments made to factors of production (such as wages, rent, interest, and profits) are eventually used to purchase goods and services, creating a flow of income and expenditure that is equal in value.

In the Circular Flow Diagram,the Value of All the Income