Figure 6-2 shows a spending flow model where both consumption and investment goods are being produced. Use the figure to answer questions .
Figure 6-2
-Refer to Figure 6-2. Washington State purchases four airplanes from Boeing. This expenditure falls under the:
A) gross private investment category and the flow is represented by 2.
B) government purchases category and the flow is represented by 2.
C) gross private investment category and the flow is represented by 3.
D) government purchases category and the flow is represented by 3.

Question

Figure 6-2 shows a spending flow model where both consumption and investment goods are being produced. Use the figure to answer questions .
Figure 6-2 
-Refer to Figure 6-2. Washington State purchases four airplanes from Boeing. This expenditure falls under the:
A) gross private investment category and the flow is represented by 2. 
B) government purchases category and the flow is represented by 2. 
C) gross private investment category and the flow is represented by 3. 
D) government purchases category and the flow is represented by 3.

Quizplus · Accepted Answer

The expenditure of Washington State purchasing airplanes from Boeing is a government purchase (as it is the state government making the purchase) and falls under flow 3, which represents government purchases. Therefore, the best choice is D.

Figure 6-2 Shows a Spending Flow Model Where Both Consumption