In a Simple Circular-Flow Diagram, Total Income and Total Expenditure

question 221

Multiple Choice

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

• A)never equal because total income always exceeds total expenditure.
• B)seldom equal because of the ongoing changes in an economy's unemployment rate.
• C)equal only when the government purchases no goods or services.
• D)always equal because every transaction has a buyer and a seller.

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Definitions:

Repaid

The action of paying back borrowed money to the lender.

Focal Date

A specific date of interest or importance within a plan, study, or project that serves as a central point of reference.

Economically Equivalent

A term used to describe two or more scenarios that have the same economic impact or value, despite being different in form or structure.

Payments

The transfer of money, goods, or services in exchange for a product or service.