Economic Awareness - Sectors of Indian Economy
Which of the following correctly identifies the flow of goods and services in the two-sector circular flow model?
Which of the following correctly identifies the flow of goods and services in the two-sector circular flow model?
medium Q8 of 15
Step-by-Step Solution
Step 1: Understand two-sector model flows
Households supply factors of production to firms; firms produce goods and services.Step 2: Identify goods and services flow
Goods and services flow from firms to households, while money flows in the opposite direction.Final Answer:
From firms to households → Option DQuick Check:
Goods and services flow = Firms to households ✅
Quick Trick: Goods flow opposite to money flow in two-sector model.
Common Mistakes:
MISTAKES- Confusing direction of goods flow with money flow.
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