A more complex circular-flow diagram for the economy of Macronia is shown below. a. What is the
Question:
a. What is the value of GDP in Macronia?
b. What is the value of net exports?
c. What is the value of disposable income?
d. Does the total flow of money out of householdsthe sum of taxes paid, consumer spending, and private savingsequal the total flow of money into households?
e. How does the government finance its spending?
Transcribed Image Text:
Government Government borrowing = $60 purchases = $150 Government Taxes = $100 - Transfers = $10 Consumer spending = $510 Private savings = $200 Wages, profit, interest, rent = $800 Households Markets for Factor Financial goods and services markets markets |1 Wages, profit, interest, rent = $800 Income from sales Borrowing and stock issues = $110 %3D Investment Firms spending = $110 Export spending = $50 Foreign borrowing and stock sales = $130 Foreign lending and stock purchases = $100 Import spending = $20 Rest of world
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a We can measure GDP in Macronia as the sum of all spending on domestically produced final ...View the full answer
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Related Book For
Macroeconomics
ISBN: 978-1319120054
3rd Canadian edition
Authors: Paul Krugman, Robin Wells, Iris Au, Jack Parkinson
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