Which of the Following Is True Regarding the Circular Flow

question 223

Multiple Choice

Which of the following is true regarding the circular flow diagram?
I. "Aggregate income" is the flow of income earned by firms.
II. Retained earnings are considered income earned by firms rather than part of households' income.
III. The government,households,and firms all have transactions in the goods market.

• A) I only
• B) I and II
• C) I and III
• D) III only

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Definitions:

Part

A section or portion of something that is separate from the whole.

Connective Tissues

Types of tissue in the body that maintain the form of organs and provide cohesion and internal support.

Muscles

Tissues in the body that contract to produce movement or maintain the position of parts of the body.

Ligaments

Strong, flexible connective tissue bands that connect bones to other bones, providing joint stability.