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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.…

Solution:- Ans – (a) Explanation:- In a sector economy, savings is assumed to be zero, and real flow in the form of factors services and final goods and services are equal to money flow between firms and households in a…

Solution:- Ans – (c) Explanation: Real flow involves exchange of goods and services, thus statement 1 is correct. Real flow is known as physical flow not the nominal flow, thus statement 2 is false.

Solution:- Ans – (a) Explanation:- The main focus of macroeconomics is to determine the income and employment level of an economy. thus it is also known as Income and Employment Theory. Thus Assertion (A) and Reason (R) are correct and…

Solution:- Ans – (d) Explanation:- Real flow is not a nominal flow it is known as Physical Flow. Thus Assertion (A) is false. Real flow involves a flow of goods and services between firms and households. Thus Reason (R) is…