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= purchases of ervices = $200 $150 = Taxes Government Government borrowing = $70 Government transfers = $20 Private savings = $170

= purchases of ervices = $200 $150 = Taxes Government Government borrowing = $70 Government transfers = $20 Private savings = $170

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Government purchases of goods and services = $200 $150 = Taxes Consumer spending = $700 Markets for goods and services Gross domestic product Investment spending = $120 Exports = $30 Imports = $50 Government | Households Firms Rest of world Government borrowing = $70 Government transfers = $20 Reference: Ref 7(22)-2 Figure 7-2: Expanded Circular-Flow Model Private savings = $170 Wages, profit, interest, rent = $1,000 D) net exports of $80 Wages, profit, interest, rent = $1,000 Factor markets Borrowing and stock issues by firms = $120 Foreign borrowing and sales of stock = $110 Foreign lending and purchases of stock = $130 C) investment spending of $120 (Figure 7-2: Expanded Circular-Flow Model) Use Figure 7-2: Expanded Circular-Flow Model. How does the government finance its spending? A) taxes of $150 plus borrowing of $70 Financial markets B) foreign borrowing and sales of stock of $110
Transcribed Image Text:Government purchases of goods and services = $200 $150 = Taxes Consumer spending = $700 Markets for goods and services Gross domestic product Investment spending = $120 Exports = $30 Imports = $50 Government | Households Firms Rest of world Government borrowing = $70 Government transfers = $20 Reference: Ref 7(22)-2 Figure 7-2: Expanded Circular-Flow Model Private savings = $170 Wages, profit, interest, rent = $1,000 D) net exports of $80 Wages, profit, interest, rent = $1,000 Factor markets Borrowing and stock issues by firms = $120 Foreign borrowing and sales of stock = $110 Foreign lending and purchases of stock = $130 C) investment spending of $120 (Figure 7-2: Expanded Circular-Flow Model) Use Figure 7-2: Expanded Circular-Flow Model. How does the government finance its spending? A) taxes of $150 plus borrowing of $70 Financial markets B) foreign borrowing and sales of stock of $110
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