Macroeconomics: Principles and Policy (MindTap Course List)
13th Edition
ISBN: 9781305280601
Author: William J. Baumol, Alan S. Blinder
Publisher: Cengage Learning
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Question
Chapter 8, Problem 2DQ
To determine
To describe: The circular flow diagram that look like in an economy with no government and to draw a new one.
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Homework (Ch 02)
The following diagram presents a circular-flow model of a simple economy. The outer set of arrows (shown in green) shows the flow of dollars, and the
inner set of arrows (shown in red) shows the corresponding flow of inputs and outputs.
Markets for
Goods and Services
Firms
Households
Markets for
Factors of Production
purchase
in product markets.
Based on this model, firms earn revenue when
Suppose Lucia earns $550 per week working as a corporate attorney for Rowan and Martin Associates. She uses $10 to buy a box of aspirin at Pillmart
F11
F12
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F10
F8
F9
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Early during the COVID-19 pandemic, the government used multiple stimulus packages to increase government
spending.
3. Using the Z-Y, NX-Y, IS-LM, UIP combined graph on the next page, what should be happening as a result?
Show the shifts on the graph itself.
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Z
NN
Y=Z
Z
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if
f
UI
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L
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c1T+I+G+NX
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Y
Y
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Y
X
Y
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Y
0
Y
20
NX
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X
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0
E
Y NX
Fiscal stimulus
Draw a simple circular flow diagram (without government) and use the relationships shown in the diagram to explain how producers’ optimism about future sales can lead to an increase in future sales.
Chapter 8 Solutions
Macroeconomics: Principles and Policy (MindTap Course List)
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Similar questions
- How would you interpret the graph of an economy? What conditions/gaps are they experiencing?arrow_forwardIn the circular flow diagram, households get their ability to pay for their consumption expenditures from the revenues they receive for their products. costs they incur for resources. incomes they earn for their resources. goods and services they get in the product markets.arrow_forwardhand written otherwise skiparrow_forward
- Tyson and Ella work at the Ruby Red Movie Theater in town. After work, they decide to watch a movie. After purchasing their tickets, they stop by the concession stand and purchase popcorn, drinks, and candy. Use the circular flow diagram to describe the purchases that Tyson and Ella made and the services and goods that were provided to them.arrow_forwardAfghanistan didn't buy covid vaccine or produce covid vaccine and what is the impact to the economy? explain in diagram and 2 graphsarrow_forwardMacroeconomics Discussarrow_forward
- Economics: Public Economics Question: 1 Refer to Graph 2. Suppose the TANF program is established. What is the individual’s consumption if they spent all of their time in leisure? Do not include a dollar sign when writing your answer. Guess: 10,000 (with margin: 0) Question: 2 Refer to Graph 2. For every dollar earned by the individual below the cutoff (such that they are eligible for TANF), benefits decrease by how much? Do not include a dollar sign when writing your answer. Guess: 0.5 (with margin: 0) Question 3: Which of the following types of balanced budget requirements (BBRs) are least effective in restricting deficits? a. ex post BBRs b. neither ex ante nor ex post BBRs c. both ex ante and ex post BBRs d. ex ante BBRs Thank you for your help and support Academic Agent!arrow_forwardcan you help me answer questions from the image attached pleasearrow_forwardQuestion 1: Specific Factors Model Let assume, you live in an economy where two goods are being produced (say x and y) and labor can be allocated in the production of either good freely, but the other factor is specific. For your more information, good “x” can be produced with labor and capital and good “y” can be produced with labor and land. Given the situation, a) How much does the each good the economy produced? b) How much labor will be employed in each sector?arrow_forward
- what is Law of economyarrow_forwardA system can be interpreted as a collection of objects such as people, resources, concepts, and procedures that are intended to perform certain functions or fulfill a purpose such as the following image: The Image illustrates how the system and its environment are in a unified whole. Based on this explanation, design 2 types of systems consisting of the components in the image taken in your current field of work. Give an explanation of how the mechanism of the system works ! Solve with step the explanation, need in 45-60 minutes max thank u. The chapter Enginering economy and system anlysisarrow_forwardIn the context of the circular flow model of the economy, the best way to describes the relationship between households, businesses, and the government?arrow_forward
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