In Terms of the Circular Flow Diagram, Households Make Expenditures

question 160

Multiple Choice

In terms of the circular flow diagram, households make expenditures in the _____ market and receive income through the _____ market.

• A)product; financial
• B)resource; product
• C)product; resource
• D)capital; product

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Definitions:

Government Expenditures

Financial spending by the government sector, including spending on infrastructure, public services, defense, and social programs.

Gross Domestic Product (GDP)

The total monetary or market value of all the finished goods and services produced within a country's borders in a specific time period, serving as a broad measure of overall domestic production.

Income Transfers

Financial transfers from individuals or groups to others without any exchange of goods or services, often part of social welfare programs.

National Income

The total amount of money earned within a country, including wages, profits, and taxes, minus subsidies.