In a Simple Circular-Flow Diagram, How Are Total Income and Total

question 96

Multiple Choice

In a simple circular-flow diagram, how are total income and total expenditure interrelated?

• A) They are seldom equal because of fluctuations in the business cycle that occur in an economy.
• B) They are equal only when all goods and services produced are sold.
• C) They are always equal because every transaction has a buyer and a seller.
• D) They are always equal because of accounting rules.

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