Because Every Transaction Has a Buyer and a Seller

question 226

Multiple Choice

Because every transaction has a buyer and a seller,

• A)GDP is more closely associated with an economy's income than it is with an economy's expenditure.
• B)every transaction contributes equally to an economy's income and to its expenditure.
• C)the number of firms must be equal to the number of households in a simple circular-flow diagram.
• D)firms' profits are necessarily zero in a simple circular-flow diagram.

---

Definitions:

Composition

In mathematics, it refers to the operation of applying one function to the result of another, denoted as (f ∘ g)(x) = f(g(x)).

Function

A linkage among inputs and a range of suitable outputs, governed by the principle that every input is coupled with a unique output.

Compounded

A process where the value of an investment increases because the earnings on it earn additional earnings over time.

Balance

A condition in which different elements are equal or in the correct proportions.