One of the principles behind the concept of the circular flow is that
A) in every economic exchange, the seller receives exactly the same amount that the buyer spends.
B) in every economic exchange, the seller receives less than the amount that the buyer spends.
C) the seller of goods receives exactly the same amount that the buyer spends, but the seller of resources receives less than the buyer spends.
D) in exchange involving products, the seller receives less than the amount the buyer spends, but in resource markets the seller receives more than the buyer spends.

Question

Quizplus · Accepted Answer

The principle behind the circular flow is that in every economic exchange, the seller receives exactly the same amount that the buyer spends. This is because in a market economy, both the buyer and the seller want to maximize their own benefits, and therefore will agree to an exchange only if they both perceive that they will be better off afterwards. This principle is applicable to both the markets for goods and services, as well as the markets for inputs and resources.

One of the Principles Behind the Concept of the Circular