Identify the correct statement in the context of Circular Flow of Income in an economy Option 1: Household receives factor services from firms. Option 2: Household invests while firm saves. Option 3: Firms produce goods and services. Option 4: Household supplies factor services to Government.

The answer is 'Firms produce goods and services.'. View full solution:

CUET Economics - Identify the correct statement in the context of Circular Flow of Income in an economy | PYQs + Solutions

CUET Economics

Macro

Easy

Household receives factor services from firms.

Household invests while firm saves.

Firms produce goods and services.

Household supplies factor services to Government.

✅ Correct Option: 3

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(B) Households refer to the families or individuals who supply factors of production to the firms and which buy the goods and services from the firms

(C) Consumer Price Index is the index of prices of a given basket of commodity which are bought by the representative consumer

(D) Wholesale Price Index refers to the percentage change in the weighted average price level.

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13 May Shift 1

Arrange the following steps of calculation of National income in sequence.

(A) Deduction of intermediate cost

(B) Estimation of value of output

(D) Deduction of depreciation and NIT

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