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    Question

    As far as Circular flow of income is considered,

    Two-sector Model is considered as the basic Model. Who among the following are party to the Model? I- Households II- Firms III- Government IV- Rest of the World
    A I & II Correct Answer Incorrect Answer
    B II & III Correct Answer Incorrect Answer
    C III & IV Correct Answer Incorrect Answer
    D I & IV Correct Answer Incorrect Answer
    E None of the above Correct Answer Incorrect Answer

    Solution

    Circular Flow of Income in a Two-Sector Economy It is defined as the flow of payments and receipts for goods, services, and factor services between the households and the firm sectors of the economy.

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