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JAMB Economics 1990 Question 3

Question 3

National Income

Use the circular flow diagram (a simple circular flow of income diagram). The flow labelled Y refers to

Diagram for this question
  1. A.real income
  2. B.factor payments
  3. C.factor input
  4. D.national income
Show the answer and explanation

Answer: B (factor payments)

Explanation

Y is money flowing from firms and government to households in return for the factors of production they supply, so it is factor payments (rent, wages, interest, profit).