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In the Circular Flow,how Are the "Value of Production," "Income

Question 208

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In the circular flow,how are the "value of production," "income," and "expenditures" related?


A) They have no relationship to each other.
B) Once tax payments are subtracted at each stage,they are equal.
C) Expenditures on GDP equals the value of production which equals income.
D) Once net exports of goods and services are subtracted from GDP,all three are equal.
E) Value of production always equals income,but expenditures is smaller because households save some of their income and do not spend it.

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