Fill in the blank with the options given in the parentheses and use the chart given to help you. While national income and domestic product must be equal, income must also equal expenditure for each of the six sectors in the circular flow diagram: firms, consumers, government, financial system, investors, and the “rest of the world.” For example, the amount of __________(options for blank: disposable income, investment spending, saving, taxes) flowing into the financial system sector must equal the amount of ____________ (saving, consumption plus savings, transfers plus government purchases, investment spending) flowing out of this sector.
Fill in the blank with the options given in the parentheses and use the chart given to help you. While national income and domestic product must be equal, income must also equal expenditure for each of the six sectors in the circular flow diagram: firms, consumers, government, financial system, investors, and the “rest of the world.” For example, the amount of __________(options for blank: disposable income, investment spending, saving, taxes) flowing into the financial system sector must equal the amount of ____________ (saving, consumption plus savings, transfers plus government purchases, investment spending) flowing out of this sector.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Fill in the blank with the options given in the parentheses and use the chart given to help you.
While national income and domestic product must be equal, income must also equal expenditure for each of the six sectors in the circular flow diagram: firms, consumers, government, financial system, investors, and the “rest of the world.”
For example, the amount of __________(options for blank: disposable income, investment spending, saving, taxes) flowing into the financial system sector must equal the amount of ____________ (saving, consumption plus savings, transfers plus government purchases, investment spending) flowing out of this sector.
Transcribed Image Text:Flow
Aggregate Demand
National Income
Disposable income (DI)
Investment spending (I)
Net taxes (NT)
Net exports (X - IM)
Consumption (C)
Government purchases (G)
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