What Does the Simple Circular-Flow Diagram Illustrate

question 102

Multiple Choice

What does the simple circular-flow diagram illustrate?

• A)that expenditure generates income so that income and the value of production are equal
• B)that the economy's income exceeds its expenditure
• C)that the expenditure of an economy exceeds its income
• D)that money "flows" from households to firms and not the other way around