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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,

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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 Government borrowing Government Taxes Government transfers Private savings Households Consumer Wages, profit, spending interest, rent Markets for goods and services Gross domestic product Firms Investment spending Exports Rest of world Imports 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? O D A 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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