Refer to Figure 16-1. Suppose the economy is in a recession and expansionary fiscal policy is pursued. Using the static AD-AS model in the figure above, this would be depicted as a movement from

The circular flow model is used to show the

A) flow of renewable natural resources. B) expansions and contractions of economic activity. C) recycling process of production materials. D) flow of expenditures and incomes in the economy. E) flow of supply and the flow of demand.

Initially, the economy is at point B on Figure 10-3 above. We conclude that before adjustment,

A) per person savings is at point D and the level of steady state investment is at point C. B) per person savings is at point E and the level of steady state investment is at point E. C) per person savings is at point G and the level of steady state investment is at point E. D) per person savings is at point C and steady state investment is at point D.