1) Briefly, how would a sharp reduction in consumer spending be represented on the Circular Flow Diagram above in terms of the Markets for Goods and Services and for the Factors of Production? 2) Briefly, how would an economic boom be represented on the Circular Flow Diagram above in terms of the Markets for Goods and Services and for the Factors of Production?

Please only solve parts a, b, and c of this introductory economics question!

The diagram below shows alternate paths for two hypothetical economies, each starting with GDP of $1 billion. Assume that Area 1 is equal to Area 2. Real Consumption FIGURE 25-1 Area 1 Year X Aren 2 Time Year Y Economy B 2% growth Economy A 1% growth h Refer to Figure 25-1. Suppose Economy A jumps to the path of Economy B at Year 0 by increasing the share of GDP that is saved. In that case, which of the following statements about Economy A is true? O a. By jumping to a new growth path at Year 0, Economy A has increased the share of national income that is consumed. O b. By Year Y, the increase in consumption made possible by the economy's higher growth rate approximately equals the consumption sacrificed in earlier years. Oc By Year X, Economy A is saving and investing the same share of its national income as it would have been had it stayed on its original path Od. Economy A will not be able to regain the losses in consumption it incurs by jumping to the path of Economy B Oe. By Year…

What is the circular flow model, and how does it illustrate the flow of goods and money in an economy?