Consider the Circular Flow of Income and Expenditure in the Canadian

question 20

Multiple Choice

Consider the circular flow of income and expenditure in the Canadian economy.Which of the following is a withdrawal from the circular flow?

• A)Your family buys weekly groceries.
• B)Bombardier exports subway cars to Mexico.
• C)You put $500 into your TFSA (tax-free savings account).
• D)The B.C.provincial government builds a new hospital.
• E)Canadian farmers sell wheat to China.

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Definitions:

Insured Drivers

Individuals who have obtained an insurance policy that covers them against financial loss or liability resulting from car accidents or theft.

Allocative Efficiency

The state of resource allocation where goods and services are distributed according to consumer preferences and utility maximization.

Producer Surplus

The difference between what producers are willing to accept for a good or service versus what they actually receive.

Consumer Surplus

The gap between the amount consumers are prepared to spend on a product or service and the actual price they pay for it.