Government purchases of goods and services $150 Government borrowing $60 Government Taxes $100 Government transfers $10 %3D Private savings = $200 Consumer Households spending = $510 Wages, profit, interest, %3D rent = $800 Markets for goods and services Factor markets Financial markets Gross Wages, profit, interest, rent = $800 domestic Borrowing and stock issues by firms = product $110 Firms Investment spending = $110 %3D Foreign borrowing and sales of stock = $130 Exports = $50 %3D %3D Rest of world Foreign lending and purchases of stock = $100 Imports = $20 %3D

Economics Today and Tomorrow, Student Edition
1st Edition
ISBN:9780078747663
Author:McGraw-Hill
Publisher:McGraw-Hill
Chapter8: Business Organizations
Section: Chapter Questions
Problem 5AA
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Question
Government purchases of
goods and services $150
Government borrowing $60
Government
Taxes = $100
Government transfers = $10
%3D
Private savings = $200
%3D
Consumer
Wages, profit,
interest,
rent = $800
Households
spending = $510
Markets for goods
and services
Factor
Financial
markets
markets
Gross
Wages, profit,
interest,
rent = $800
domestic
Borrowing and
stock issues by
firms = $110
product
%3D
%3D
Firms
Investment
spending = $110
%3D
Foreign borrowing
and sales of stock = $130
Exports = $50
%3D
Rest of world
Foreign lending and
purchases of stock = $100
Imports = $20
%3D
Transcribed Image Text:Government purchases of goods and services $150 Government borrowing $60 Government Taxes = $100 Government transfers = $10 %3D Private savings = $200 %3D Consumer Wages, profit, interest, rent = $800 Households spending = $510 Markets for goods and services Factor Financial markets markets Gross Wages, profit, interest, rent = $800 domestic Borrowing and stock issues by firms = $110 product %3D %3D Firms Investment spending = $110 %3D Foreign borrowing and sales of stock = $130 Exports = $50 %3D Rest of world Foreign lending and purchases of stock = $100 Imports = $20 %3D
2 A more complex circular-
flow diagram for the econo-
my of Macronia is shown at
right. (Note that Macronia
has investment and financial
markets.)
a. What is the value of GDP
in Macronia?
b. What is the value of net
exports?
c. What is the value of dis-
posable income?
Transcribed Image Text:2 A more complex circular- flow diagram for the econo- my of Macronia is shown at right. (Note that Macronia has investment and financial markets.) a. What is the value of GDP in Macronia? b. What is the value of net exports? c. What is the value of dis- posable income?
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