In a simple economy, what is the key difference between real and nominal (money) flows? no difference exists between real and nominal flows in a simple economy. Real flows represent the exchange of goods and services, while nominal flows represent the exchange of money for those goods and services. Real flows occur only in the goods market, while nominal flows occur in the factor market. Real flows refer to the movement of money, while nominal flows refer to goods and services. A factory in a small town shuts down, laying off all its workers. Usin g the circular flow model, what are the likely consequences? Firms will increase production to compensate for the job losses. Household incomes decrease, reducing spending on goods and services, which hurts other businesses. Household incomes increase, boosting spending in other sectors of the economy. The financial sector will provide enough loans to households, preventing any economic impact