Figure 6-1 Shows the Circular Flow Model Where Only Consumption

question 142

Multiple Choice

Figure 6-1 shows the circular flow model where only consumption goods are being produced. Use the figure to answer questions .
Figure 6-1
-Refer to Figure 6-1. The arrow marked "C" represents the flow of:

• A) factors of production.
• B) factor incomes.
• C) personal consumption expenditures.
• D) consumer goods and services.

---

Definitions:

Financial Assets

Assets that derive value from a contractual claim, such as stocks, bonds, bank deposits, and other securities.

Total Assets

The sum of all resources owned by an individual, corporation, or country, including both current and noncurrent assets.

U.S. Households

Refers to living arrangements or economic units in the United States consisting of one or more people who occupy a housing unit.

Informational Efficiency

A characteristic of financial markets where all relevant information is quickly and accurately reflected in security prices, allowing for fair and efficient trading.