Use the Following to Answer Questions

question 228

Multiple Choice

Use the following to answer questions :
Figure: Circular-Flow Model
-(Figure: Circular-Flow Model) Look at the figure Circular-Flow Model. If the circular-flow model is in equilibrium (the sum of money flowing into each box is equal to the sum of the money flowing out of it) , which of the following is likely to happen if there is a decrease in imports?

• A)an increase in the nominal GDP
• B)a decrease in the nominal GDP
• C)an increase in the unemployment rate
• D)an increase in the nominal GDP, a decrease in the nominal GDP, and an increase in the unemployment rate

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Definitions:

Disbursement Float

The time delay between when a check is issued and when it is actually deducted from the payer's bank account, affecting cash management.

Transaction

An agreement or exchange between two parties that involves the sale, purchase, or trade of goods, services, or information.

Book Balance

The Book Balance represents the amount of money a company records in its accounting records, not necessarily reflecting the available or actual cash on hand.

Available Cash Balance

The amount of cash that a company has on hand after accounting for all operational and investment expenses.