In the Simple Circular Flow Model

question 141

Multiple Choice

In the simple circular flow model

• A) income is equal to spending.
• B) saving is equal to consumer spending.
• C) factor payments are equal to goods and services.
• D) goods and services are equal to consumer spending.

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Definitions:

Comparative Advantage

The ability of an individual, company, or country to produce a good or service at a lower opportunity cost than competitors.

Knitting

The craft or action of creating fabric by interlocking loops of yarn using needles.

Baking

The process of cooking food by dry heat, typically in an oven.

Division Of Labor

Breaking down the production of a good into separate tasks