Which of the Following Best Illustrates the Circular flOw Model

question 109

Multiple Choice

Which of the following best illustrates the circular flow model in action?

• A) Bobbie goes to work and builds cars; she uses the income she receives to buy food at the grocery store.
• B) Evan buys a new couch; the owner of the furniture store uses some of the money from the sale to pay her supplier and uses the rest to take her family out to dinner.
• C) Boeing experiences a surge in orders for new airplanes, prompting the company to hire more workers.
• D) All of these answers illustrate the workings of the circular flow model.

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Definitions:

Mutual Defense Pact

An international agreement between countries to support each other in case of an attack by an external party, providing a collective security mechanism.

North Atlantic Treaty Organization

An intergovernmental military alliance formed in 1949 between North American and European countries to ensure mutual defense and security.

Military Aggression

actions by a state to use military force against another state or territory, often without a legitimate cause or provocation, leading to conflict or war.

Eisenhower Doctrine

A Cold War policy declared by U.S. President Dwight D. Eisenhower, stating American commitment to defend the Middle East against attack by any communist country.