d. Does the total flow ofmoney out of households-the sum of taxes paid,consumer spending, andprivate savings-equal thetotal flow of money intohouseholds?e. How does the governmentfinance its spending? Government purchases ofgoods and services $150Government borrowing $60GovernmentTaxes = $100Government transfers = $10%3DPrivate savings = $200%3DConsumerWages, profit,interest,rent = $800Householdsspending = $510Markets for goodsand servicesFactorFinancialmarketsmarketsGrossWages, profit,interest,rent = $800domesticBorrowing andstock issues byfirms = $110product%3D%3DFirmsInvestmentspending = $110%3DForeign borrowingand sales of stock = $130Exports = $50%3DRest of worldForeign lending andpurchases of stock = $100Imports = $20%3D

The diagram in the question states how the income in an economy flows. The model is known as…

Answered: d. Does the total flow of money out of…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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d. Does the total flow of money out of households- the sum of taxes paid, consumer spending, and private savings-equal the total flow of money into households? e. How does the government finance its spending?