The expanded circular-flow diagram The diagram below shows an expansive circular-flow diagram for the U.S. economy, with arrows pointing in the direction that money flows. To facilitate reference, letter labels have been placed on certain arrows of the diag Government purchases of goods and services 0000 Consumer spending Markets for goods and services Taxes Gross domestic product Investment spending Exports Imports Government Households Firms Government borrowing Government transfers Rest of world Private savings Wages, profit, interest, rent Factor markets Wages, profit, interest, rent Borrowing and stock issues by firms Foreign borrowing and sales of stock Foreign lending and purchases of stock Financial markets Which one of the following arrows best represents the flow of money when people in the European Union purch American-made motorcycles? When households buy food at grocery stores, purchase cars from used-car dealers, or pay for a vacation, the they spend goes directly to

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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1. The expanded circular-flow diagram
Aa Aa
The diagram below shows an expansive circular-flow diagram for the U.S. economy, with arrows pointing in the
direction that money flows. To facilitate reference, letter labels have been placed on certain arrows of the diagram.
Government purchases of
goods and services
0000
Consumer
spending
Markets for goods
and services
Taxes
Gross
domestic
product
Investment
spending
Exports
Imports
Government
Households
Firms
Rest of world
Government borrowing
Government transfers
Private savings
Wages, profit,
interest,
rent
Factor
markets
Wages, profit,
interest, rent
Borrowing and
stock issues by
firms
Foreign borrowing
and sales of stock
Foreign lending and
purchases of stock
Financial
markets
Which one of the following arrows best represents the flow of money when people in the European Union purchase
American-made motorcycles?
D
When households buy food at grocery stores, purchase cars from used-car dealers, or pay for a vacation, the cash
they spend goes directly to
Transcribed Image Text:1. The expanded circular-flow diagram Aa Aa The diagram below shows an expansive circular-flow diagram for the U.S. economy, with arrows pointing in the direction that money flows. To facilitate reference, letter labels have been placed on certain arrows of the diagram. Government purchases of goods and services 0000 Consumer spending Markets for goods and services Taxes Gross domestic product Investment spending Exports Imports Government Households Firms Rest of world Government borrowing Government transfers Private savings Wages, profit, interest, rent Factor markets Wages, profit, interest, rent Borrowing and stock issues by firms Foreign borrowing and sales of stock Foreign lending and purchases of stock Financial markets Which one of the following arrows best represents the flow of money when people in the European Union purchase American-made motorcycles? D When households buy food at grocery stores, purchase cars from used-car dealers, or pay for a vacation, the cash they spend goes directly to
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