The Circular Flow Diagram Is Best Described as A(n)

question 193

Multiple Choice

The circular flow diagram is best described as a(n)

• A)abstraction of little value in macroeconomics.
• B)exact representation of the cause and effect relationship between spending and employment.
• C)model that clarifies the relationship between spending and income.
• D)model to explain the relationship between the federal deficit and tax revenues.

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Definitions:

Wealth Earned

Financial gains obtained through work, investment, or other means of income generation.

Distribute

To distribute means to give out or spread something widely among a number of recipients.

Artificial Entities

Organizations created by law, such as corporations or partnerships, that have legal rights and obligations separate from those of their members.

Morally Accountable

Being responsible or answerable for one's actions from an ethical or moral standpoint.