n the circular flow of expenditure and income, why must the total value of production in an economy equal the total value of income? A. Taxes on the production of goods and services are determined according to individual income. B. Domestic expenditures on imports generally equal foreign expenditures on U. S. exports. C. Every penny spent on a good or service must end up as someone's income. D. People tend to spend all of their income on goods and services.

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Business

Alice Harmon

27 September, 00:03

n the circular flow of expenditure and income, why must the total value of production in an economy equal the total value of income? A. Taxes on the production of goods and services are determined according to individual income. B. Domestic expenditures on imports generally equal foreign expenditures on U. S. exports. C. Every penny spent on a good or service must end up as someone's income. D. People tend to spend all of their income on goods and services.

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Jack Bush · Answer 1

Answer is given below:

C. every penny spent on a good and service must end up as someone's income. Hence, value of production is equal to value of income.