The Major Lesson of the Circular Flow Diagram Is That

question 108

Multiple Choice

The major lesson of the circular flow diagram is that

• A) saving must always be less than investment.
• B) taxes must always be greater than government expenditures.
• C) total income in the economy must always equal total spending.
• D) tax receipts must be equal to transfer payments.

---

Definitions:

Instinct

A complex behavior that is rigidly patterned throughout a species and is unlearned.

Cultural Variations

Differences in beliefs, behaviors, and practices among various cultures that arise from geographical, historical, socio-economic, and political factors.

Aggressiveness

A behavior characterized by being bold or assertive, often in a forceful or hostile manner that intends to dominate or intimidate.

Nuclear Weapons

Explosive devices that derive their destructive force from nuclear reactions, either fission or a combination of fission and fusion, capable of causing massive destruction.