Figure 6-2 Shows a Spending Flow Model Where Both Consumption

question 51

Multiple Choice

Figure 6-2 shows a spending flow model where both consumption and investment goods are being produced. Use the figure to answer questions .
Figure 6-2
-Refer to Figure 6-2. The purchase of a new tractor by Farmer Brown is:

• A) classified as gross private investment and the flow is represented by 5.
• B) classified as gross private investment and the flow is represented by 2.
• C) classified as consumption and the flow is represented by 5.
• D) classified as consumption and the flow is represented by 1.

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Definitions:

Accounting Records

Documentation and books that hold financial information and transactions of a business, essential for preparing financial statements.

Computer Equipment

The physical hardware used in or with computers, including peripherals such as keyboards, monitors, external drives, and other devices.

Initial Investment

The initial amount of money spent to start a project, acquire an asset, or invest in a financial product.

Connecting Link

A piece or component that joins two or more parts together in a mechanism or system.