Question

6.Reason for the circular flow of income is
(2 Points)

government intervention

production of goods and services

mutual interdependence of producer and household sector

invention of money​

Answer 1

Answer:

mutual interdependence of producer and household sector

Answer 2

The reason is the mutual interdependence of producer and household sector

• Producers and housing make up the prime economic aspects, and both are reliant on the movement of cash.
• Money has been moving from families to manufacturers to pay for the purchase of consumer goods.
• The circular income flow is the name given to this ongoing exchange of funds between sectors.
• Thus, total household consumption always equalises producer production, necessitating a reciprocal reliance.

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