Which of the following best illustrates the circular flow model in?
Which of the following best illustrates the circular flow model in action?
1) Bobbie goes to work and builds cars, and uses the income she receives to buy food at the grocery store.
2) Evan buys a new couch; the owner of the furniture store uses some of the money from the sale to pay her supplier, and uses the rest to take her family out to dinner.
3) Boeing experiences a surge in orders for new airplanes, prompting the company to hire more workers.
4) All of the above
1 is correct – there is an element of equilibrium. It is fair to assume the same amount of Bobbie’s income goes towards groceries week after week (assuming job security building cars – yeah, right – thankfully for Bobbie it’s just a model).
#2 & #3 both illustrate single events that do not occur on a continuous basis – no equilibrium – therefore #4 is an incorrect answers.
My Model Aircraft Collection 27th May 2009 – GeminiJets & others
