In the Circular Flow Diagram, the Counterclockwise Direction Shows the Flow

question 283

Multiple Choice

In the circular flow diagram, the counterclockwise direction shows the flow of _____, where households supply _____ and businesses supply _____.

• A) money; purchases of goods and services; income to households
• B) money; labor; goods and services
• C) goods and services; labor; goods and services
• D) goods and services; purchases of goods and services; income to households

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Definitions:

Dictator Game Experiments

Behavioral experiments in economics where an individual (the "dictator") is given a sum of money and can choose how to split it between themselves and a second participant who has no influence over the decision.

Sense of Fairness

The natural or developed perception and understanding individuals have towards equity, justice, and impartiality within interactions and exchanges.

Dictator Game

An experimental paradigm in behavioral economics where one player, "the dictator," determines how to split an endowment between themselves and another player.

Behavioral Economists

Investigators who explore how various psychological, cognitive, emotional, cultural, and social factors determine the economic decisions of both individuals and organizations.