Question

State two basic principles of circular flow of income
2 marks

Answer 1

Explanation:

(i) Goods and services flow in one direction

(2) the money payment to acquire them, flow in the return direction giving rise to a circular flow.

Answer 2

Hey Mate  !

The circular flow of income involves two basic principles:

(i) In any exchange process, the seller (or producer) receives the same amount which the buyer (or consumer) spends.

(ii) Goods and services flow in one direction and the money payment to acquire them, flow in the return direction giving rise to a circular flow. Thus, product flow from the seller to the buyer is necessarily a complement of money (income) flow from the buyer to the seller.

  Hope it helps u !