Statement A is incorrect because circular flow does occur in a closed economy (between households and firms). Statement D is incorrect because money flow of factor payments goes from firms to households, not households to firms. B and C are correct.
Which of the following statements are incorrect ?
(A) Circular flow of income does not take place in a closed economy.
(B) Real flow consists of flow of factor services from households to firms.
(C) In a two-sector economy, total production is always equal to total consumption.
(D) Money flow consists of flow of factor payments from households to firms.
Choose the correct answer from the options given below :
Verified 13 Jul 2026.
(A) and (B) only
(A), (B) and (C) only
(A) and (D) only
(C) and (D) only
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