The circular flow of income shows that
A) households transact only in the goods market.
B) governments purchase goods and services.
C) firms generally are the demanders in the goods markets and suppliers in the factor markets.
D) None of the above answers is correct.
B
You might also like to view...
When calculating the cost of college, which of the following should you probably not include?
a. The cost of tuition b. The cost of books required for college classes c. The income you would have earned had you not gone to college d. The cost of rent for your off-campus apartment.
The trade deficit is the mirror image of the required capital inflows. So why worry about these capital inflows?
A. Trade deficits automatically cause larger budget deficits. B. Before long, the Germans, Japanese, and other foreigners will own the United States and will be dictating policy to the U.S. government. C. These capital inflows create debts on which interest and principal payments will have to be made in the future. D. During the period of trade deficits, personal consumption must be reduced to build up wealth to repay the debt created.