Question

Which of the following is included in real flow?

• A. Flow of goods
• B. Flow of services
• C. Both (A) and (B)
• D. None of these

Hint:

Real flow = flow of tangible things (goods) and actions (services). It's everything but the money.

Answer 1

The Correct Option is C

The real flow in the circular flow model refers to the movement of actual, physical goods and services between households and firms, not money. This includes:

The flow of goods and services from firms to households.
The flow of factor services (like labor, land use) from households to firms.
Since both goods and services are part of this non-monetary exchange, the correct answer is (C).