One of the "Real" Flows in the Circular Flow of Income

question 65

Multiple Choice

One of the "real" flows in the circular flow of income is

• A)goods going from consumers to producers.
• B)goods going from producers to consumers.
• C)money payments going from consumers to producers.
• D)factor services going from producers to consumers.
• E)money payments going from producers to consumers.

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Definitions:

PQ Increase

A rise in the product of price level and quantity of goods and services produced, indicating growth in the value of economic output.

Classical Economist

An economist adhering to a school of thought originating in the late 18th and early 19th centuries, focusing on free markets, the role of self-interest, and the importance of limiting government intervention in the economy.

Interest Rates

A lender's charge to a borrower, expressed as a proportion of the principal, for accessing assets.

Supply and Demand

Economic model of price determination in a market, stating that the price of a good or service varies directly with its demand and inversely with its supply.