Question : Which of the following are true?
- Circular flow of income does not takes place in case of closed economy.
- Physical flow involves exchange of goods and services.
Option 1: Both are true.
Option 2: Both are false.
Option 3: Statement 1 is true and statement 2 is false.
Option 4: Statement 1 is false and statement 2 is true.
Answer (1)
25th Jan, 2024
Correct Answer: Statement 1 is false and statement 2 is true.
Solution :
Even in case of closed economy circular flow of income takes place between households and firms.
Physical flow involves exchange of goods and services.
Hence, Option D is correct.
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