Asked by Paytonn Burrows on Jun 09, 2024
Verified
In the simple circular-flow diagram, with households and firms, GDP can be computed as the
A) income received by households, in the form of wages, rent and profit.
B) income received by households in the form of wages.
C) payments made by firms for labor.
D) profits received by households.
Circular-Flow Diagram
A visual model of the economy that shows how dollars flow through markets among households and firms
GDP
The total worth of all goods and services produced within a country during a given time frame is defined as Gross Domestic Product, reflecting the nation's economic activity.
- Comprehend the basics of the circular-flow diagram in economic modeling.
Verified Answer
AJ
alezandra jordanJun 09, 2024
Final Answer :
A
Explanation :
In the simple circular-flow diagram, GDP can be computed as the total income received by households, which includes not just wages but also rent and profit. This reflects the economy's total output as the sum of all incomes earned.
Learning Objectives
- Comprehend the basics of the circular-flow diagram in economic modeling.
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