Real flow is exchange of goods & services between firms & households. & Money flow is exchange between 2 sectors
Answer:
A: Optimization in differences
B: Optimization in levels
C: Optimization in differences
D: Optimization in levels
Explanation:
Optimization in levels <em>Vs.</em> Optimization in differences
Optimization in levels is a method of selecting different alternatives on the basis of calculating net benefits( net benefits = benefits - costs) a person realizes from those alternatives.
Optimization in differences, on the other hand, is a method of selecting different alternatives on the basis of calculating change in levels of costs and change in levels of benefits to derive net change in benefits.
How to choose?
<u>Optimization in levels</u>: (net benefit) look at total benefit – total cost
<u>Optimization in differences</u>: look at the change in the net benefit of one option compared to another
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