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Ans – (c) Explanation:- Money flow consists of exchange of money between households and firms. Firms pay factor payments in money to households. The households in turn purchase goods and services and pay in money.

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

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.