The Circular Flow Diagram Shows That

question 256

Multiple Choice

The circular flow diagram shows that

• A)the value of total income is equal to the total value of expenditures on final goods and services.
• B)firms pay households wages,and households receive transfer payments from firms.
• C)households spend all their income on goods and services.
• D)GDP will be less than the total value of expenditures on final goods and services in the economy.

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Definitions:

Preschooler

A child typically between the ages of 3 and 5 years old who is in the developmental stage before entering formal schooling.

Psychosocial Stage

Stages of psychological and social development postulated by Erik Erikson, through which an individual progresses throughout their lifetime.

Identity Versus Identity Confusion

Erikson’s fifth developmental stage, which individuals experience during the adolescent years. At this time, adolescents examine who they are, what they are all about, and where they are going in life.

Initiative Versus Guilt

A stage in Erickson's psychosocial development theory where children learn to exercise independence and initiative, but may feel guilt when unsuccessful.