Simplified circular flow diagram for
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Simplified circular flow diagram for
the economy of Micronia. ( no investment in Micronia.)
a. what is the value of GDP in Micronia?
b. What is the value of net exports?
c. what is the value of disposable income?
d. Does the total flow of money of of houses holds the sum of taxes paid and consumer spending equal the total flow of money into households?
e. How does the government of Micronia finance its purchases of goods and services?
forno.Government purchases ofgoods and services = $100GovernmentTaxes = $100ConsumerHouseholdsWages, profit,spending = $650interest,rent = $750Markets for goodsFactorand servicesmarketsGrossWages, profit,domesticeinterest,productrent = $7500FirmsExports = $20Imports = $20Rest of worldpurchases ofrvices = $150Government borrowing = $60GovernmentTaxes = $100Government transfers = $10
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