Answer to Question #205863 in Microeconomics for Thelma

Question

Which of the following statements is incorrect? (4 marks) a) The three major flows in the economy are total production, total income and total spending. b) There are two sets of markets in a simple economy: goods and services markets and factor markets. 1.8 c) In the simple circular flow of economic activity, real" flows of goods and factors, and financial flows, move in opposite direction. d) Firms are buyers in the goods markets and sellers in factor markets, while households are buyers in factor markets and sellers in goods markets. 

Answer 1

d) Firms are buyers in the goods markets and sellers in factor markets, while households are buyers in factor markets and sellers in goods markets.