The Simple Circular flOw Model Shows That _____

question 8

Multiple Choice

The simple circular flow model shows that _____.

• A) firms supply inputs to households and households supply output to firms
• B) households supply goods and services to the economy
• C) firms supply output to households and households supply inputs to firms
• D) households supply both output and inputs to the economy

Comprehending the mere exposure effect and its implications.

Recognizing the role of familiarity in shaping attitudes and preferences.

Describing embodied attitudes and the impact of celebrity endorsement.

Understanding operant conditioning and its application.

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Definitions:

Disposable Income

Disposable income is the amount of money that households or individuals have available for spending and saving after income taxes are accounted for.

Consumption

The use of goods and services by households or individuals, forming part of the aggregate demand in an economy.

Induced Consumption

The portion of consumer spending that varies with income. As income increases, consumers will spend more, and as income decreases, consumers will spend less.

Disposable Income

The financial capabilities households have for saving and spending endeavors post income tax deductions.