2.4.1 National Income

Question 1

What is the circular flow of income?

Answer 1

flow of money from economic activity between households and firms

Question 2

What is the difference between income and wealth?

Answer 2

Income is a flow of money

Wealth is the total value of all the assets owned by individuals of firms in an economy

Question 3

What is the opportunity cost of accumulating wealth?

Answer 3

consuming

Question 4

What is the opportunity cost of increased future wealth?

Answer 4

spending in the short run