Which of the Following Is an Example of Spending on Goods

question 61

Multiple Choice

Which of the following is an example of spending on goods and services in the circular flow model?

• A)Belinda purchases a new computer for her tax-preparation business.
• B)Javier buys 800 square feet of wood flooring for his vacation home.
• C)Celeste buys fresh herbs at the farmers' market to use in her restaurant.
• D)Timmy purchases a new examination table for use in his veterinary clinic.

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Definitions:

Capitalism

An economic system where private individuals own and control the means of production and distribution of goods, with minimal government interference.

Socialism

An economic and political system where the government or the public as a whole owns and controls the means of production, aiming for an equitable distribution of wealth and resources.

Market System

An economic system where decisions regarding investment, production, and distribution are based on supply and demand, with prices serving as signals to participants.

Circular Flow Diagram

An illustration showing the flow of resources from households to firms and of products from firms to households. These flows are accompanied by reverse flows of money from firms to households and from households to firms.