Archives Answers

Ans – (b) Explanation:- Real flow consists of factor services from households to the firm and physical goods from firms to households in return. Thus it is also called a physical flow.

Ans – (b) Explanation:- losses is a flow variable as it is measured over a period of time.

Ans – (b) Explanation:- Stock variables are measured at a particular point of time. For example, Bank balance as on 1.4.2023.

Ans – (a) Explanation:- Two-Sector Economy consists of Households  and firms only.

Ans – (c) Explanation:- Gifts from abroad is considered as a transfer payment as no services and goods are provided against it. Thus it is not a a factor income.

Ans  – (b) Explanation:- National Wealth, is a stock variable as it is measured at a point of time.

Ans – (d) Explanation:- Circular Flow of Income consists of three phases Generation Phase, Distribution Phase and Disposition phase.

Solution:- Ans – (d) Explanation:- Net Investment is a flow, Capital is stock concept. Thus Statement 1 and 2 both are false.

Solution:- Ans – (b) Real flow refers to the flow of factors services from households to firm and flow of goods and services from firm to households. Thus it is also called physical flow. Thus Statement 1 and Statement 2…

Solution:- Ans – (d) Explanation:- Flow of income is circular in a two-sector economy as all factor income is expended by households on the purchase of goods and services produced in an economy due to the assumption of zero savings.…