Assume That Rents Flow Clockwise in a Circular Economic Flow

question 92

Multiple Choice

Assume that rents flow clockwise in a circular economic flow diagram.This implies that land flows:

• A) clockwise and capital flows counterclockwise.
• B) clockwise and profits flow counterclockwise.
• C) counterclockwise and capital flows clockwise.
• D) counterclockwise and profits flow clockwise.

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Definitions:

Income

Financial earnings generated through employment, investments, or other sources, contributing to an individual's purchasing power.

Utility Function

A mathematical representation that ranks consumer preferences over a set of goods or services, often leading to an optimal choice.

Consumption

The usage of goods and services by households or individuals, forming a major component of aggregate demand in an economy.

Income

Income refers to the money received by an individual or entity, typically in the form of wages, salaries, or returns from investments, over a specified period of time.