Question

One person’s spending becomes another person’s income. This statement is

a. the basis for all economics.
b. the Quantity Theory of Money.
c. the Marginal Productivity Theory of Resource Allocation.
d. the Circular Flow Model.
e. profit maximization rule for perfectly competitive firms.

Answer 1

d. the Circular Flow Model

Step-by-step explanation:

Based on the information provided within the question it can be said that this statement is an example of the Circular Flow Model. This model (like mentioned in the question) illustrates the flow of cash from different people or company's in different industries. Where one person/company pays another, which takes it in as income and uses that to pay another company for what they need and so on.