According to a circular flow diagram of a given country, which of the following is false? a) Income received by households can be spent, saved, or used to pay taxes b) Expenditures received by firms can be used to pay resources, taxes, or investment spending c) Governments receive tax revenue, borrow
Q: Which of the following would cause the level of income to change by the greatest amount? a. An…
A: Level of income is affected by the change in the price level, change in national income or…
Q: Pick TWO answers. a. Wealth can be measured as a flow over time. b. Disposable income measures…
A: Wealth refers to the accumulated economic resources which can be measured in terms of real income.…
Q: GDP in an economy is $4,600 billion. Consumer expenditures are $3,500 billion, government purchases…
A: Gross domestic product is the summation of four components that are consumption, investment,…
Q: If Government Spending (G) is $200 million, Tax Revenue (T) is $260 million, Consumption is $ 300…
A: GDP by the expenditure approach is the sum total of all the expenditures by all the sector in the…
Q: Position each of the following eight terms in the UK’s circular flow of income diagram below:…
A:
Q: Consider the economy of Cocoland, where citizens consume only coconuts. Assume that coconuts are…
A: When tax rate decreases as the amount subject to taxation increases, it is regressive taxation. When…
Q: Disposable income ________ when ________. a.decreases; taxes increase b.decreases; transfer…
A: Disposable income is a part of total earned income of households, which they can use to save and…
Q: Which of the following will not cause an increase in equilibrium G a) An increase in government…
A: As per the expenditure method of computing national income. Y= C+I+G+NX Here, C = domestic…
Q: A rise in investment by $200,000 will lead to a __________________________________. Group of answer…
A: The rise in the investment leads to rise in the expenditure in the economy. The expenditure helps to…
Q: ASSUME THAT A THREE SECTOR ECONOMY IN COUNTRY W. THE AMOUNT OF AUTONOMOUS CONSUMPTION IS RM 300…
A: Aggregate demand is given by the aggregate of consumption, investment, and government expenditure.
Q: Which of the following is NOT a leakage from the circular flow of income? a. Imports. b. Saving. c.…
A: The concept that depicts the income or capital that in turn diverges through some sort of iterative…
Q: In the circular flow of income and spending: (a) Investment results in a decrease in the volume of…
A: The circular flow model demonstrates how money flows from production sector to household sector and…
Q: For the economy as a whole Income must be more than expenditures. Select one: a. False b. True
A: For an economy, since total injections into the circular flow is equal to total leakages from the…
Q: Which of the following is a leakage from the circular flow of income and expenditure in South…
A: Leakage is something which lowers the income across the economy (outflow of income) and injection is…
Q: Assume that a three-sector economy in Country W. The amount of autonomous consumption is RM300…
A: GDP refers to the total value of finished goods and services that produced within the economic…
Q: Which of the following best characterizes the circular flow of income? Businesses buy resources from…
A: The circular flow of income model depicts how income flows through the economy between economic…
Q: Calculate GDP using the expenditure approach (Amount in billions of dollars): Corporate profits: $…
A: Expenditure approach GDP formula is as follows :- GDP = Consumption Expenditure + Investment…
Q: Increase in tax by the government: a. None of these b. Decreases the consumption by individuals c.…
A: When government increases taxes, the disposable income of the people tends to reduce. In other…
Q: Show how a GH¢2,000 increase in government spending financed by a GH¢2,000 increase in taxes will…
A: Output = Consumption spending + Investment spending + Government spending + Exports - Imports. Y =…
Q: In 1968, mandatory government spending was approximately ________ of GDP and in 2108 mandatory…
A: Government spending is in the form of making expenditures on the social welfare of the society which…
Q: Definition of expenditure control measure
A: Expenditure can be defined as the payments made for the purchase of any goods or services where…
Q: At any given amount of income, an increase in consumption will result in a. A rise in total demand…
A: Consumer use their income in two ways: 1. On consumption of goods and services, 2. On saving for…
Q: If the government wants to increase real GDP levels, it could
A: Through fiscal policy government can increase real gdp.
Q: Calculate the equilibrium real GDP for the economy 2. What is the level of consumption at the…
A: " Since this question has multiple parts, we will answer only first three parts for you. If you have…
Q: Which of the following will, unambiguously, ?decrease the price level :Select one a. a decrease in…
A: Aggregate demand is affected by changes in government spending and aggregate supply is affected by…
Q: Which of the following is not an injection into the circular flow of income Select one: a. Spending…
A: Since you have asked multiple question, we will solve the first question for you. If you want any…
Q: Which one of the following statements is FALSE? (a) There are four broad groups of decision‐making…
A: The circular flow model is used to show the gross domestic product(GDP) of an economy as the flow of…
Q: In the circular flow of income and expenditure model... O A. the level of Income for factors of…
A: The simplest form of Circular Flow Model consists two sectors, i.e., household sector and firm…
Q: Disposable income is the amount a household has A after subtracting autonomous spending. B…
A: Disposable income is the income the consumer has which is available for spending.
Q: If the government began providing free textbooks to college students who would otherwise have bought…
A: Government spending relates to state administration funds allocated on the purchase of commodities…
Q: The following table shows the national income data for an economy in year 2020. ITEMS RM (Million)…
A: The measure that depicts the final value of goods and services produced in an economy during a given…
Q: Household Consumption $6,400 U.S. Exports $500 Government Spending…
A: GDP=C+I+G+(X-M) =6400+1600+2200+(500-700) =10200+(-200) =10200-200=10000
Q: . Using the expenditure approach, government expenditures include a) defense and nondefense federal,…
A: In the expenditure approach of GDP, the expenditure of the government includes the spending of money…
Q: Assume an economy in which: (i) there are no exports and no imports, (ii) investors always want to…
A: The equilibrium is where the aggregate spending is equal to aggregate production. The aggregate…
Q: In a simple closed economy, consumption is given by the relationship C=0.75Y, where C is consumption…
A: Gross domestic product is the value of final goods and services produced in the economy within a…
Q: We have the following information for an economy. All data are in billion dollars. Category Value…
A: Answer - "Thank you for submitting the question. But, we are authorized to solve one question at a…
Q: 29. Suppose that household consumption is $1,000, investment is $600, government spending is $300,…
A: Given that Household consumption expenditure =$1000 Investment expenditure =$600 Government…
Q: The actual GDP is currently $100 billion per year and potential real GDP is currently $200 billion.…
A: Use the below formula: GDP gap = Potential GDP - Actual GDP
Q: Which of the following options is/are true? At the equilibrium level of national income i. aggregate…
A: Aggregate spending consists of household consumption (C), planned investment (I), Government…
Q: Use the following information to solve the question: Total income = 40 000 Autonomous consumption =…
A: Total Consumption includes autonomous consumption and induced consumption. Total Consumption=…
Q: In a closed economy, what determines consumption, investment, and government expenditures? Please…
A: Gross domestic product is the market value of final goods and services that are produced in an…
Q: Which of the following are separate flows in the circular flow model? Question 74 A) the flow…
A: In the circular flow model, it is assumed that households will spend all of their income to goods…
Q: Suppose that a country grows at an annual rate of G = 2%, imagine that at time "t" the country has…
A: Given Growth rate = 2 % Time = 10 years Income level after 10 years =Yt * (1 + growth rate)^time =…
Q: Assume that a three-sector economy in Country W. The amount of autonomous consumption is RM300…
A: The given information: Autonomous consumption=RM300+0.5Yd T=0.2Y I=RM 250 million G=RM150 Million
Q: Assume that a three-sector economy in Country W. The amount of autonomous consumption is RM300…
A: Given Information Autonomous consumption (C) = RM 300 million Marginal propensity to consume…
Q: If actual GDP is $640 billion and there is a positive GDP gap of $20 billion, potential GDP is
A: Answer: Given, Actual GDP = $640 billion Positive GDP gap = $20 billion Potential GDP: It refers to…
Q: with the aid of a diagram, explain the income and expenditure model
A: The income and expenditure model is a Keynesian cross model that shows the equilibrium condition of…
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
- Which one of the following statements is FALSE? (a) There are four broad groups of decision‐making units in the economy:households, firms, government and the foreign sector;(b) Savings are an important injection into the circular flow of income andspending in the economy;(c) Taxes are a leakage or withdrawal from the flow of income and spending in the economy;(d) Spending by households on consumer goods and services is calledconsumption spending.Good day . can you please assist on the following question below Multiple-choice questions: Select one correct answer for each of the following. Q.1.1 Which of the following represent injections into the circular flow of income and spending?(a) Exports and investment;(b) Government spending and imports;(c) Government spending and saving;(d) Imports and saving. Q.1.2 In the circular-flow diagram, the goods markets are where: (a) The households purchase goods from firms;(b) Firms purchase goods from government;(c) Firms purchase goods from households;(d) The government purchases goods from households. Q.1.3 Money overcomes the problem of a double coincidence of wants inherent in the barter system through its function as a:(a) unit of account.(b) store of value.(c) medium of exchange.(d) standard of deferred payment.What is the relative importance of consumption spending (C) in aggreagte demand and some factors that affect it? What is the relative importance of investment spending (I) in aggreagte demand and some factors that affect it? What is the relative importance of government spending (G) in aggreagte demand and some factors that affect it? What is the relative importance of Net Export (NX) (Net Export = spending on exports (X) - imports (M)) in aggreagte demand and some factors that affect it?
- Which one of the following statements is FALSE?(a) There are four broad groups of decision‐making units in the economy:households, firms, government and the foreign sector;(b) Savings are an important injection into the circular flow of income andMultiple‐choice questions: Select one correct answer for each of the following. In your answer booklet, write down only the number of the question and next to it, the letter of the correct answer.spending in the economy;(c) Taxes are a leakage or withdrawal from the flow of income and spending in the economy;(d) Spending by households on consumer goods and services is calledconsumption spending.Fill in the blank with the choices in parentheses While national income and domestic product must be equal, income must also equal expenditure for each of the six sectors in the circular flow diagram: firms, consumers, government, financial system, investors, and the “rest of the world.” For example, the amount of __________(options for blank: disposable income, investment spending, saving, taxes) flowing into the financial system sector must equal the amount of ____________ (saving, consumption plus savings, transfers plus government purchases, investment spending) flowing out of this sector.Which of the following is a leakage from the circular flow of income and expenditure in South Africa? Select one: a. A decision by a major supermarket chain to sell Danish beer. b. The sale of export fruit to the European Union. c. Government purchases of textbooks for state-run schools. d. Investment by South African Breweries in a new brewery. e. Defence expenditure by the South African government, via contracts with local military suppliers.
- Suppose you are given the following data for a particular economy (unit: Millions of Euros):Gross National Income mp (GNImp) =1650Investment (I) = 220(Iliq) Net investment = 210Private consumption(C) =1100Net External Income (NEI) = 0Net Indirect Taxes (NIT) = 231Public Spending (G) = 363 Calculate: a) Balance of Goods and Services or Net Exports (NX) and Amortizations/Depreciations (A). b) Net National Product at Base Prices (NNPbp) and Net Domestic Product at Base Prices (NDPbp)When a business buys a new computer to design its product, this spending is called? A. Goverment expenditure B. Investment C. Consumption D. ExportWrite the Total Spend equivalence in an open and governmental economy. (Variables will be written with their names, not abbreviations)
- From the table below answer, the following questions in the spaces provided, consider the following data (in billion $) for a country in a particular year: (Personal consumption expenditure (C 1000 (Exports (x 120 (Government Purchases of goods and services (G 400 (Imports (m 110 Gross Domestic Product (Y) 4,500 (Taxes (T 200 5) What is the value of gross investment (I)? Answer 6) What is the amount of investment financed by national savings? Answer 7) What is the amount of investment financed by borrowing from or lending to the rest of the world? AnswerSuppose the data BELOW is for a given year from the annual Economic Report of the President. Calculate GDP using the expenditure approach (Amount in billions of dollars): Corporate profits: $ 305Depreciation: $ 479Gross private domestic investment: $716Personal taxes: $ 565Personal saving: $120Government spending: 924Imports: $ 547Exports: $ 427Personal consumption expenditures: $ 2,966Indirect business taxes: $ 370Contributions for Social Security (FICA): $ 394Transfer payments and other income: $ 967The equations below describe the aggregate demand of an economy. There are neither a flow of goods and services nor capital across borders of this country. Y=C +I +G………. (1) C=Co+C(Y^d)……. (2) Y^d= Y-T…………. (3) T=t(Y) ……………. (4) I=Io+I(r)………… (5) G=Go……………... (6) M=PL(r,Y)……… (7) where Y is gross real domestic product, C is aggregate consumption expenditure by households, I is aggregate investment expenditure by firms, is government purchases of goods and services, Y^d is disposable personal income, and T is total income tax payments to government by…