The basic circular flow model shows that:

a. total income received by the households is less than the total value of goods and services produced because of leakages.

b. total income received by the households is different from the dollar value of goods and services produced because the units of measurement are not the same.

c. total income received by the households is less than total payments to business because there are business profits.

d. total income received by the households must be equal to the dollar value of all goods and services produced.

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Sonia DhawanLv10

21 Oct 2020

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Related questions

The Gross National Product (GNP) of the United States is equal to

A. the value of the total income received by all of the residents of the United States.

B. the value of final goods and services produced within the United States.

C. the value of the total income received by all households in the United States, after taxes are paid.

D. the value of final goods and services produced by U.S. factors of production.

If a large amount of production within a country takes place at foreign-owned facilities, then it is likely that the country's GDP will be (larger than/smaller than) GNP.

greenyak981

What is the market for factors of production?

What is the market for factors of production?
1. The market for factors of production is where households and firms interact to trade factors of production for factor payments. For example this is where people provide firms with labor and firms pay them with wages.
What is the money market?
1. The money market is where households, firms, and the government may save and/or invest their money to earn interests. Money market includes banks, stock market, bonds market, and other financial institutions where economic actors can buy and sell financial assets to earn interests and/or dividends.
Who are the three economic actors in the circular flow model?
1. In a circular flow model, the three main economic actors are the households, firms, and the government. Households include the typical individual consumers. Firms include businesses and similar producers in the economy. Finally, the government refers to the whole government system from federal to local level.
How is the national income of an economy determined?
1. The national income of an economy is determined by measuring the total value of the output produced in an economy or the total income earned by the actors in the economy. In a circular flow model, we can see that the value of total output produced should equal the total value of income generated and earned in the economy. This is because every dollar spent by someone in the economy is received by another person in the economy as income.
What is GDP?
1. The gross domestic product or GDP represents the sum total of the value of the final goods and services produced within the economy for a given year. It is the most commonly used measure of its economy’s productivity and income.

Outline the flow of goods and resources to and from economic decision makers One way to understand how the economy works is the circular flow model. This model demonstrates the flow of resources, goods, services, and income between households and business through the resource market and the market for goods and services. In a few paragraphs, please:

1) Describe how money and resources are exchanged in the resource market, indicating Who gets the resource Who gets the income (175 words)

Refer to the Circular Flow model resources provided below:

The Circular Flow Diagram;http://econperspectives.blogspot.com/2008/04/circular-flow-diagram.html

Circular Flow of Economic Activity: The Flow of Goods, Services & Resources

http://study.com/academy/lesson/circular-flow-of-economic-activity-the-flow-of-goods-services-resources.html