Which of the Following Statements Is FALSE

question 246

Multiple Choice

Which of the following statements is FALSE?

• A) One definition of total income is that it is the annual cost of producing the entire output of final goods and services.
• B) Transactions in which households buy final goods and services occur in the factor market.
• C) The value of total output is identical to total income.
• D) Saving is the difference between consumer income and expenditures.

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Definitions:

Economic Model

A simplified representation or framework that economists use to describe and analyze economic processes, relationships, or phenomena.

Capital Goods

Long-lasting goods purchased and used by businesses to produce goods and services and contribute to their output.

Investment

The allocation of resources, often money, into assets or projects with the expectation of generating profit or income.

Marginal Costs

The increase in the sum total of expenses that comes with the production of one additional unit of a product or service.