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

question 148

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. John, a resident of the U.S., buys a new set of golf clubs from a U.S. firm. This transaction is part of:

• A) personal consumption expenditures and the flow is represented by 1.
• B) personal consumption expenditures and the flow is represented by 5.
• C) private investment expenditure and the flow is represented by 1.
• D) private investment expenditure and the flow is represented by 5.

---

Definitions:

Dessalines

Jean-Jacques Dessalines was a leader of the Haitian Revolution and the first ruler of an independent Haiti under the 1805 constitution.

Commercial Sanctions

Penalties imposed by one country or a coalition of countries against another for economic reasons, often to discourage certain policies or activities.

Hamilton's Financial Programs

A series of measures proposed by Alexander Hamilton, the first U.S. Secretary of the Treasury, aimed at stabilizing the American economy after the Revolutionary War, including the establishment of a national bank.

Amendment

An Amendment is a formal change or addition proposed or made to a legal document, particularly constitutions, statutes, and contracts, to improve, clarify, or update its content.