In the Expanded Circular Flow Diagram, the Rest of the World

question 140

Multiple Choice

In the expanded circular flow diagram, the rest of the world interacts directly with

• A) households.
• B) firms.
• C) product markets.
• D) factor markets.

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Definitions:

Millennium

A period of one thousand years.

Federal Reserve Policy

The monetary policy actions by the Federal Reserve, aimed at influencing economic conditions, particularly interest rates and inflation.

Economic Downturn

A period of reduced economic activity characterized by declining GDP, falling incomes, and rising unemployment.

New Deal

Initiatives involving public works, financial reforms, and regulatory measures, launched by President Franklin D. Roosevelt in the 1930s in the United States, designed to assist in overcoming the effects of the Great Depression.