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Which of the Following Statements About the Circular-Flow Diagram Is

Question 227

Multiple Choice

Which of the following statements about the circular-flow diagram is correct?


A) One must imagine that the economy operates without money in order to make sense of the diagram.
B) The diagram leaves out details that are not essential for understanding the economic transactions that occur between households and firms.
C) The government cannot be excluded as a decision maker in a circular-flow diagram.
D) All of the above are correct.

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