Which of the following represents an income flow in the circular flow of domestic output and national income?
A) Net exports
B) Investment expenditures
C) Government purchases
D) Corporate profits

Question

Quizplus · Accepted Answer

Corporate profits represent income generated by firms in the domestic economy, which is a part of the national income. The circular flow of domestic output and national income shows how income and production circulate between households, businesses, and the government, and corporate profits are a part of this flow. Net exports (A), investment expenditures (B), and government purchases (C) represent spending flows, not income flows.

Which of the Following Represents an Income Flow in the Circular