Use the Following to Answer Questions

question 157

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) and there is a decrease in government spending, which of the following is likely to happen?

• A)an increase in the nominal GDP
• B)an increase in the real GDP
• C)an increase in the unemployment rate
• D)an increase in the inflation rate

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Definitions:

Dielectric

A non-conducting material that can be polarized by an external electric field, commonly used as an insulating material between conducting surfaces.

Metal Conductors

Materials that allow the flow of electrical current due to their free electron movement.

Insulating Material

Materials that hinder the flow of electric current, used to protect against electrical shocks and to contain electrical wiring.

Surface Area

The amount of surface of an object, generally expressed in square inches, square feet, etc.