The Figure Given Below Represents the Circular Flow of Income

question 93

Multiple Choice

The figure given below represents the circular flow of income between households, firms, financial intermediaries, and foreign countries.
Figure 4.2

-Refer to Figure 4.2. Suppose households reduce saving to $7,000. Everything else held constant, consumption spending must now be:

• A) $18,000.
• B) $22,500.
• C) $28,000.
• D) $32,000.
• E) $38,000.

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Definitions:

Prenatal Development

The process of growth and development within the womb from conception to the birth of a baby.

Newborn States

Refers to the different physiological and behavioral conditions experienced by infants, including sleeping, waking, crying, and feeding.

Arousal

A physiological and psychological state of being awake, alert, and engaged, often triggered by sensory stimulation or emotional experiences.

Teratogen

A substance or factor that can cause malformation of an embryo or fetus.