Final answer:
The moon is considered to be 'falling' around Earth due to the balance between gravity pulling it in and its tangential velocity causing it to move forward, keeping it in orbit rather than letting it collide with the Earth.
Step-by-step explanation:
The claim that the moon is falling around Earth means that it is continuously being pulled towards Earth by gravity, but because it has a horizontal tangential velocity, it keeps missing Earth. This concept, often illustrated by the thought experiment of a cannonball shot at a high velocity from a mountain, explains that if the ground curves away at the same rate the object falls, it will orbit rather than collide with Earth.
The tangential velocity of the moon is crucial to this balance. It ensures that as the moon falls towards the Earth due to gravity, it also moves forward, maintaining its distance from the Earth, thus not crashing into it.