New U.S. home sales surged Purchases of new U.S. homes surged in December and 2015 was the best year for housing since 2007. Existing-home sales also increased in the best year since 2006. The inventory of existing homes on the market was smaller than demand. Source: Bloomberg, January 28, 2016 Where do sales and inventories of existing homes appear in the circular flow of expenditure and income? Explain how an increase in sales of existing homes and a low inventory of existing homes affects real GDP. Sales and inventories of existing homes in the circular flow of expenditure and income and GDP. O A. are not part of current expenditure, so they do not appear; do not influence OB. appear as a flow of investment from firms through goods markets to households; increase O C. appear as a flow of investment from households through factor markets; increase O D. are part of the flow of investment, so they do appear%3B increase OE. appear as a flow of consumption expenditure from households to firms through financial markets; do not influence

New U.S. home sales surged Purchases of new U.S. homes surged in December and 2015 was the best year for housing since 2007. Existing-home sales also increased in the best year since 2006. The inventory of existing homes on the market was smaller than demand. Source: Bloomberg, January 28, 2016 Where do sales and inventories of existing homes appear in the circular flow of expenditure and income? Explain how an increase in sales of existing homes and a low inventory of existing homes affects real GDP. Sales and inventories of existing homes in the circular flow of expenditure and income and GDP. O A. are not part of current expenditure, so they do not appear; do not influence OB. appear as a flow of investment from firms through goods markets to households; increase O C. appear as a flow of investment from households through factor markets; increase O D. are part of the flow of investment, so they do appear%3B increase OE. appear as a flow of consumption expenditure from households to firms through financial markets; do not influence

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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TOPIC: Comparing total expenditures and total production
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Given the following: Ca = $100, Ig = $50, Xn = − $10, and G = $30, what is the economy’s equilibrium GDP
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