The Figure Given Below Represents the Circular Flow of Income

question 67

Multiple Choice

The figure given below represents the circular flow of income between households, firms, financial intermediaries, and foreign countries. Figure 4.2 Refer to Figure 4.2.Suppose households reduce saving to $7, 000.Everything else held constant, consumption spending must now be:

• A)$18, 000.
• B)$22, 500.
• C)$28, 000.
• D)$32, 000.
• E)$38, 000.

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Definitions:

Collective Bargaining

The process by which employers and unions negotiate the terms of employment, including wages, hours, and working conditions.

Legally Binding

A contract or agreement that is enforceable by law, requiring all parties involved to fulfill their obligations as outlined.

Union Membership

Refers to individuals who belong to a labor union and often contribute dues in exchange for representation and benefits.

Great Britain

An island in the North Atlantic Ocean off the northwest coast of continental Europe, comprising England, Scotland, and Wales, and forming the largest part of the United Kingdom.