When Saving Leaks Out of the Circular Flow of Income

question 129

Multiple Choice

When saving leaks out of the circular flow of income and spending,

• A)total income necessarily falls.
• B)it leaks out of the financial system.
• C)it flows to borrowers.
• D)it increases the size of the spending flow.

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Definitions:

Extrinsic Rewards

Benefits and incentives provided by external factors, such as money, grades, or praise, which motivate behavior not inherently enjoyable.

Intrinsic Rewards

Internal satisfaction or fulfillment derived from engaging in an activity, without external incentives.

Continuous Reinforcement

A reinforcement schedule in which a particular response is always reinforced.

Conditioned Response

A learned response to a previously neutral stimulus after it has been repeatedly associated with an unconditioned stimulus.