Assertion (A): In the circular flow, real flows and money flows move in opposite directions.
Reason (R): Every real flow of goods or factor services is paid for by a money flow the other way.

Both A and R are true, and R is the correct explanation of A.Correct answerYour answerBoth A and R are true, but R is not the correct explanation of A.Correct answerYour answerA is true, but R is false.Correct answerYour answerA is false, but R is true.Correct answerYour answer

Show the answer and explanation

CorrectNot quiteAnswer A

Correct answer: A

Goods go to households and payment goes to firms; labour goes to firms and wages go to households.
R explains why the directions are opposite.

Concept: Opposite directions
Typical timeTypical: 70 s
Your timeYours: —

The rule this testsThe circular flow of income

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Ten questions from Basic Concepts & the Circular Flow, at your own pace.

Assertion (A): In the circular flow, real flows and money flows move in opposite directions.Reason (R): Every real flow of goods or factor services is paid for by a money flow the other way.

Explanation

Assertion (A): In the circular flow, real flows and money flows move in opposite directions.
Reason (R): Every real flow of goods or factor services is paid for by a money flow the other way.