In the production phase of the circular flow of income, the income are:
In the production phase of the circular flow of income, the income are:
a) Created
b) Distributed
c) Spent
d) Accumulated
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Ans – a)
Explanation:-
The first phase of the circular flow is the production phase where the goods are produced by the household. In this phase, the value is added to the intermediate goods and that is converted into final goods.
In this whole process, the household provides its services in the production process. Thus income is created to the household for value addition.
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