Which of the following statement/statements are true?
Statement 1: Money flow involves flow of money between firms and households in form of factor payments and expenditure on goods and services and is also called physical flow.
Statement 2: Real flow is also known as nominal flow and involves flow of goods and services between government and households.

Both the statements are false.

The correct answer is Option 2: Both the statements are false.

Statement 1: Money flow involves flow of money between firms and households in form of factor payments and expenditure on goods and services and is also called physical flow. This is false. Money flow involves flow of money between firms and households in form of factor payments and expenditure on goods and services and is also called NOMINAL flow (NOT PHYSICAL FLOW).
Statement 2: Real flow is also known as nominal flow and involves flow of goods and services between government and households. This is also false. Real flow is also known as PHYSICAL flow (NOT NOMINAL FLOW) and involves flow of goods and services between government and households.