The diagram that shows the income received and payments made by each sector of the economy is the ?
Correct answer: C. circular flow diagram
- A. income-expenditures diagram
- B. aggregate demand-aggregate supply diagram
- C. circular flow diagram
- D. income-price diagram
Explanation
A circular flow diagram traces income received and payments made among households, firms, government, and the foreign sector. It shows how income, spending, and production continually circulate through the economy.
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