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Imagine you receive an allowance of $10 every week. This year, your allowance increased to $12. However, the price of candy, your favorite treat, has
Imagine you receive an allowance of $10 every week. This year, your allowance increased to $12. However, the price of candy, your favorite treat, has also gone up by 20%. Do you think you can now buy more, less, or the same amount of candy with your allowance? a) More candy b) Less candy c) The same amount of candy d) It depends on the price increase of other thingsIn the circular flow of income model, some factors inject new money into the economic cycle, while others withdraw it. Which of the following is an injection into the circular flow of income? a) Investment by firms b) Savings by households c) Taxes collected by the government d) Imports by domestic firms
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