Figure 6-2 shows a spending flow model where both consumption and investment goods are being produced. Use the figure to answer questions .
Figure 6-2
-Refer to Figure 6-2. John, a resident of the U.S., buys a new set of golf clubs from a U.S. firm. This transaction is part of:
A) personal consumption expenditures and the flow is represented by 1.
B) personal consumption expenditures and the flow is represented by 5.
C) private investment expenditure and the flow is represented by 1.
D) private investment expenditure and the flow is represented by 5.

Question

Figure 6-2 shows a spending flow model where both consumption and investment goods are being produced. Use the figure to answer questions .
Figure 6-2 
-Refer to Figure 6-2. John, a resident of the U.S., buys a new set of golf clubs from a U.S. firm. This transaction is part of:
A) personal consumption expenditures and the flow is represented by 1. 
B) personal consumption expenditures and the flow is represented by 5. 
C) private investment expenditure and the flow is represented by 1. 
D) private investment expenditure and the flow is represented by 5.

Quizplus · Accepted Answer

The purchase of golf clubs by John is considered personal consumption expenditure, and the flow of goods from firms to households is typically represented by flow 1 in economic circular flow diagrams.

Figure 6-2 Shows a Spending Flow Model Where Both Consumption