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.

Question

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.

Quizplus · Accepted Answer

The Answer of 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.

The Figure Given Below Represents the Circular Flow of Income