Which of the Following Statements About the Circular-Flow Diagram Is

question 227

Multiple Choice

Which of the following statements about the circular-flow diagram is correct?

• A)One must imagine that the economy operates without money in order to make sense of the diagram.
• B)The diagram leaves out details that are not essential for understanding the economic transactions that occur between households and firms.
• C)The government cannot be excluded as a decision maker in a circular-flow diagram.
• D)All of the above are correct.

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