In the circular flow of income model of an economy, Y, C, I, G, X, S, T and M represent total income, consumption, investment, government expenditure, exports, saving, taxation and imports respectively.
Which statement is correct?
1 )
At equilibrium, the levels of Y and C are always the same.
2 )
Governments always adjust G so that the economy is in equilibrium.
If I is not equal to S, it is still possible for the national income to be in equilibrium.
4 )
If the national income is in equilibrium, X must be equal to M.
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