The Figure Given Below Represents the Circular Flow of Income

question 37

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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