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Money flows are opposite to real flows. How? |
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Answer» Money flows are opposite to real flows. Because money flow are in response to the real flows. Example-There is a real flow of goods and services from the producers to the households. It is in response to it, that the households makes payments to the producers. So, that money flows from the households to producers in terms of consumption expenditure. Likewise, there is a real flow, of factor services from the households to the producers. It is in response to it, that the producers make payments to the households. So that, money flows from producers to the households in terms of factor payments. |
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