Final answer:
True. Economic expansion occurs when an economy is growing and people are spending more money.
Step-by-step explanation:
True. Economic expansion occurs when an economy is growing and people are spending more money. When a country's output of goods and services increases over time, it leads to economic growth. This growth is reflected in the circular flow diagram, where more items are available for sale as long as people have jobs and continue to spend their money on those products. On the other hand, if people lose their jobs or are fearful about the future, they will not spend money, which would hurt the circular flow of economic activity, and the overall economy will contract.