The income and expenditure approaches to measuring a nation’s GDP can be combined using the circular flow model. Categorize each flow in the following table as part of either aggregate demand or national income. 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, consumpti0on plus savings, transfers plus government purchases, investment spending).
The income and expenditure approaches to measuring a nation’s GDP can be combined using the circular flow model. Categorize each flow in the following table as part of either aggregate demand or national income. 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, consumpti0on plus savings, transfers plus government purchases, investment spending).
Survey of Economics (MindTap Course List)
9th Edition
ISBN:9781305260948
Author:Irvin B. Tucker
Publisher:Irvin B. Tucker
Chapter11: Gross Domestic Product
Section: Chapter Questions
Problem 13SQ
Related questions
Question
The income and expenditure approaches to measuring a nation’s GDP can be combined using the circular flow model.
Categorize each flow in the following table as part of either aggregate demand or national income .
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, consumpti0on plus savings, transfers plus government purchases, investment spending).
Transcribed Image Text:Flow
Aggregate Demand
National Income
Disposable income (DI)
Investment spending (I)
Net taxes (NT)
Net exports (X - IM)
Consumption (C)
Government purchases (G)
O oo
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 1 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
Survey of Economics (MindTap Course List)
Economics
ISBN:
9781305260948
Author:
Irvin B. Tucker
Publisher:
Cengage Learning
Survey of Economics (MindTap Course List)
Economics
ISBN:
9781305260948
Author:
Irvin B. Tucker
Publisher:
Cengage Learning
Brief Principles of Macroeconomics (MindTap Cours…
Economics
ISBN:
9781337091985
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Essentials of Economics (MindTap Course List)
Economics
ISBN:
9781337091992
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning