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The Circular Flow Model Illustrates the Crucially Important Idea of Macroeconomics

Question 41

Multiple Choice

The circular flow model illustrates the crucially important idea of macroeconomics, which is that:


A) every expenditure of someone in the economy is exactly equal to the income of another.
B) only two markets exist in every economy-input and output.
C) income is lower when there is more spending on goods and services.
D) the flow of two things in the economy-"stuff" and "money"-travel in the same direction.

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