(Figure 7-1: Circular-Flow Model) Use Figure 7-1: Circular-Flow Model. If the circular-flow model is in equilibrium (the sum of money flowing into each box is equal to the sum of the money flowing out of it) and there is a decrease in exports, holding everything else constant, which outcome is likely to occur? A) a decrease in the nominal GDP B) an increase in the real GDP C) a decrease in the unemployment rate D) an increase in the inflation rate

(Figure 7-1: Circular-Flow Model) Use Figure 7-1: Circular-Flow Model. If the circular-flow model is in equilibrium (the sum of money flowing into each box is equal to the sum of the money flowing out of it) and there is a decrease in exports, holding everything else constant, which outcome is likely to occur? A) a decrease in the nominal GDP B) an increase in the real GDP C) a decrease in the unemployment rate D) an increase in the inflation rate

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Wages,
dividends, interest,
rent = $500
Households Consumer
spending
= $400
Taxes
= $100
Factor
markets
Government
Goods and
services
markets
Wages,
dividends, interest,
rent = $500
Firms
Imports
= $30
Government
purchases of Exports
= $30
goods and
services
= $100
Reference: Ref 7(22)-1 Figure 7-1: Circular-Flow Model
Rest of
world
(Figure 7-1: Circular-Flow Model) Use Figure 7-1: Circular-Flow
Model. If the circular-flow model is in equilibrium (the sum of money
flowing into each box is equal to the sum of the money flowing out of
it) and there is a decrease in exports, holding everything else constant,
which outcome is likely to occur?
A) a decrease in the nominal GDP
B) an increase in the real GDP
C) a decrease in the unemployment rate
D) an increase in the inflation rate

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