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Solution:- Goods, Services Real Flow involves exchange of Goods and Services.

Solution:- Firms, Households In a two-sector economy, Household sector supplies factor services only to Firms and the firms hire factor services only from Households.  

Solution:- Physical Flow Real Flow is also known as Physical Flow.

Solution:- Flow, Flow variables are time-dimensional.

Solution:- Real Real flow determines the magnitude of the growth process in an economy.

Solution:- Stock Stock variable refers to that variable, which is measured at a particular point of time.

Solution:- Government, Foreign In a two-sector economy, there is no government and foreign sector.

Solution:- Disposition, Firms In the Disposition phase, income received by factors of production, is spent on goods and services produced by Firms.

The given statement is correct, i.e., flow of income is circular is a two-sector economy. The income received by households from firms for their factor services is spent by them on the purchase of goods and services produced by the…

In a two-sector model, the national product, in terms of money value of goods and services produced, is distributed among the productive factors. It means, total money value of output is given to factors of production in the form of…