Use the Following to Answer Questions

question 101

Multiple Choice

Use the following to answer questions:
-(Figure 7-1: Circular-Flow Model) Use Figure 7-1: Circular-Flow Model. If the circular-flow model is in equilibrium (the sum of money flowing into each box is equal to the sum of the money flowing out of it) and there is a decrease in investment spending, holding everything else constant, which outcome is likely to occur?

• A) an increase in the nominal GDP
• B) an increase in the real GDP
• C) an increase in the unemployment rate
• D) an increase in the inflation rate

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