In a Circular-Flow Diagram,total Income and Total Expenditures in an Economy

question 81

Multiple Choice

In a circular-flow diagram,total income and total expenditures in an economy are:

• A)equal because firms are ultimately owned by households.
• B)equal only if there is no saving.
• C)equal because every transaction has a buyer and a seller.
• D)always equal because some people's income is not for production.

---

Definitions:

Economic Necessity

The requirement of economic resources or actions to satisfy basic needs or preserve financial stability.

Puritans

A group of English Protestants in the 16th and 17th centuries who sought to purify the Church of England from its Catholic practices.

Heads of Households

Individuals who are recognized as the primary providers and decision-makers within their home or family unit.

Future Slaves

A speculative concept referring to individuals or populations potentially subjected to extreme exploitation or control in future societal or economic structures.