Which of the following statements is FALSE?
A) The value of total income is equal in value to total output because profit is a cost of production.
B) In the circular flow model, households sell factor services to businesses in return for factor payments.
C) Businesses sell goods and services to households who use their income to pay for them.
D) Total income is always greater than total output.

Question

Quizplus · Accepted Answer

Total income can be equal to or less than total output, but it cannot be greater than total output because all income ultimately comes from the production and sale of goods and services.

Which of the Following Statements Is FALSE