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Direction: Read the below case and answer the questions that follow:Circular Income Flow in a Two Sector Economy: In the figure given we can see that upper loop shows the resources such as land, capital and entrepreneurial ability flow from households to firms in the direction shown by the arrow direction.The money flows from firms to the households as factor payments in the form of wages, rent, interest and profits, shown by the arrow direction.The lower part of the figure shows the flow of money from households to firms in the form of consumption expenditure done by the households to purchase the goods and services produced by the firms, making the flow of goods and services from firms to households.Thus, we see that money flows from business firms to households as factor payments and then it flows from households to firms. Thus, there is, in fact, a circular flow of money or income. This is how the economy functions.Which of the following is not the significance of Circular Flow of Income?a)It reflects structure of an economy.b)It shows interdependence among different sectors.c)It shows injections and leakages from flow of money.d)It does not help in estimation of national income and related aggregates.Correct answer is option 'D'. Can you explain this answer? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Direction: Read the below case and answer the questions that follow:Circular Income Flow in a Two Sector Economy: In the figure given we can see that upper loop shows the resources such as land, capital and entrepreneurial ability flow from households to firms in the direction shown by the arrow direction.The money flows from firms to the households as factor payments in the form of wages, rent, interest and profits, shown by the arrow direction.The lower part of the figure shows the flow of money from households to firms in the form of consumption expenditure done by the households to purchase the goods and services produced by the firms, making the flow of goods and services from firms to households.Thus, we see that money flows from business firms to households as factor payments and then it flows from households to firms. Thus, there is, in fact, a circular flow of money or income. This is how the economy functions.Which of the following is not the significance of Circular Flow of Income?a)It reflects structure of an economy.b)It shows interdependence among different sectors.c)It shows injections and leakages from flow of money.d)It does not help in estimation of national income and related aggregates.Correct answer is option 'D'. Can you explain this answer? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Direction: Read the below case and answer the questions that follow:Circular Income Flow in a Two Sector Economy: In the figure given we can see that upper loop shows the resources such as land, capital and entrepreneurial ability flow from households to firms in the direction shown by the arrow direction.The money flows from firms to the households as factor payments in the form of wages, rent, interest and profits, shown by the arrow direction.The lower part of the figure shows the flow of money from households to firms in the form of consumption expenditure done by the households to purchase the goods and services produced by the firms, making the flow of goods and services from firms to households.Thus, we see that money flows from business firms to households as factor payments and then it flows from households to firms. Thus, there is, in fact, a circular flow of money or income. This is how the economy functions.Which of the following is not the significance of Circular Flow of Income?a)It reflects structure of an economy.b)It shows interdependence among different sectors.c)It shows injections and leakages from flow of money.d)It does not help in estimation of national income and related aggregates.Correct answer is option 'D'. Can you explain this answer?.

Solutions for Direction: Read the below case and answer the questions that follow:Circular Income Flow in a Two Sector Economy: In the figure given we can see that upper loop shows the resources such as land, capital and entrepreneurial ability flow from households to firms in the direction shown by the arrow direction.The money flows from firms to the households as factor payments in the form of wages, rent, interest and profits, shown by the arrow direction.The lower part of the figure shows the flow of money from households to firms in the form of consumption expenditure done by the households to purchase the goods and services produced by the firms, making the flow of goods and services from firms to households.Thus, we see that money flows from business firms to households as factor payments and then it flows from households to firms. Thus, there is, in fact, a circular flow of money or income. This is how the economy functions.Which of the following is not the significance of Circular Flow of Income?a)It reflects structure of an economy.b)It shows interdependence among different sectors.c)It shows injections and leakages from flow of money.d)It does not help in estimation of national income and related aggregates.Correct answer is option 'D'. Can you explain this answer? in English & in Hindi are available as part of our courses for Commerce. Download more important topics, notes, lectures and mock test series for Commerce Exam by signing up for free.

Here you can find the meaning of Direction: Read the below case and answer the questions that follow:Circular Income Flow in a Two Sector Economy: In the figure given we can see that upper loop shows the resources such as land, capital and entrepreneurial ability flow from households to firms in the direction shown by the arrow direction.The money flows from firms to the households as factor payments in the form of wages, rent, interest and profits, shown by the arrow direction.The lower part of the figure shows the flow of money from households to firms in the form of consumption expenditure done by the households to purchase the goods and services produced by the firms, making the flow of goods and services from firms to households.Thus, we see that money flows from business firms to households as factor payments and then it flows from households to firms. Thus, there is, in fact, a circular flow of money or income. This is how the economy functions.Which of the following is not the significance of Circular Flow of Income?a)It reflects structure of an economy.b)It shows interdependence among different sectors.c)It shows injections and leakages from flow of money.d)It does not help in estimation of national income and related aggregates.Correct answer is option 'D'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of Direction: Read the below case and answer the questions that follow:Circular Income Flow in a Two Sector Economy: In the figure given we can see that upper loop shows the resources such as land, capital and entrepreneurial ability flow from households to firms in the direction shown by the arrow direction.The money flows from firms to the households as factor payments in the form of wages, rent, interest and profits, shown by the arrow direction.The lower part of the figure shows the flow of money from households to firms in the form of consumption expenditure done by the households to purchase the goods and services produced by the firms, making the flow of goods and services from firms to households.Thus, we see that money flows from business firms to households as factor payments and then it flows from households to firms. Thus, there is, in fact, a circular flow of money or income. This is how the economy functions.Which of the following is not the significance of Circular Flow of Income?a)It reflects structure of an economy.b)It shows interdependence among different sectors.c)It shows injections and leakages from flow of money.d)It does not help in estimation of national income and related aggregates.Correct answer is option 'D'. Can you explain this answer?, a detailed solution for Direction: Read the below case and answer the questions that follow:Circular Income Flow in a Two Sector Economy: In the figure given we can see that upper loop shows the resources such as land, capital and entrepreneurial ability flow from households to firms in the direction shown by the arrow direction.The money flows from firms to the households as factor payments in the form of wages, rent, interest and profits, shown by the arrow direction.The lower part of the figure shows the flow of money from households to firms in the form of consumption expenditure done by the households to purchase the goods and services produced by the firms, making the flow of goods and services from firms to households.Thus, we see that money flows from business firms to households as factor payments and then it flows from households to firms. Thus, there is, in fact, a circular flow of money or income. This is how the economy functions.Which of the following is not the significance of Circular Flow of Income?a)It reflects structure of an economy.b)It shows interdependence among different sectors.c)It shows injections and leakages from flow of money.d)It does not help in estimation of national income and related aggregates.Correct answer is option 'D'. Can you explain this answer? has been provided alongside types of Direction: Read the below case and answer the questions that follow:Circular Income Flow in a Two Sector Economy: In the figure given we can see that upper loop shows the resources such as land, capital and entrepreneurial ability flow from households to firms in the direction shown by the arrow direction.The money flows from firms to the households as factor payments in the form of wages, rent, interest and profits, shown by the arrow direction.The lower part of the figure shows the flow of money from households to firms in the form of consumption expenditure done by the households to purchase the goods and services produced by the firms, making the flow of goods and services from firms to households.Thus, we see that money flows from business firms to households as factor payments and then it flows from households to firms. Thus, there is, in fact, a circular flow of money or income. This is how the economy functions.Which of the following is not the significance of Circular Flow of Income?a)It reflects structure of an economy.b)It shows interdependence among different sectors.c)It shows injections and leakages from flow of money.d)It does not help in estimation of national income and related aggregates.Correct answer is option 'D'. Can you explain this answer? theory, EduRev gives you an ample number of questions to practice Direction: Read the below case and answer the questions that follow:Circular Income Flow in a Two Sector Economy: In the figure given we can see that upper loop shows the resources such as land, capital and entrepreneurial ability flow from households to firms in the direction shown by the arrow direction.The money flows from firms to the households as factor payments in the form of wages, rent, interest and profits, shown by the arrow direction.The lower part of the figure shows the flow of money from households to firms in the form of consumption expenditure done by the households to purchase the goods and services produced by the firms, making the flow of goods and services from firms to households.Thus, we see that money flows from business firms to households as factor payments and then it flows from households to firms. Thus, there is, in fact, a circular flow of money or income. This is how the economy functions.Which of the following is not the significance of Circular Flow of Income?a)It reflects structure of an economy.b)It shows interdependence among different sectors.c)It shows injections and leakages from flow of money.d)It does not help in estimation of national income and related aggregates.Correct answer is option 'D'. Can you explain this answer? tests, examples and also practice Commerce tests.