Economics For Today
10th Edition
ISBN: 9781337613040
Author: Tucker
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Question
Chapter 15, Problem 2SQP
To determine
Explain the reason for the value of business output of goods and services is equals the income of the households.
Expert Solution & Answer
Trending nowThis is a popular solution!
Students have asked these similar questions
The simple circular flow model shows that:
households are on the buying side of both product and resource markets.
businesses are on the selling side of both product and resource markets.
households are on the selling side of the resource market and on the buying side of the product market.
businesses are on the buying side of the product market and on the selling side of the resource market.
Critically analyze the importance of the Circular Flow model and use it to explain why the Gross Domestic Product (GDP) equals Aggregate Expenditure (AE) and Aggregate Income (AI).
Using the basic circular flow model, explain whythe value of businesses’ output of goods andservices equals the income of households.
Chapter 15 Solutions
Economics For Today
Ch. 15.6 - Prob. 1YTECh. 15 - Prob. 1SQPCh. 15 - Prob. 2SQPCh. 15 - Prob. 3SQPCh. 15 - Prob. 4SQPCh. 15 - Prob. 5SQPCh. 15 - Prob. 6SQPCh. 15 - Prob. 7SQPCh. 15 - Prob. 8SQPCh. 15 - Prob. 9SQP
Ch. 15 - Prob. 10SQPCh. 15 - Prob. 11SQPCh. 15 - Prob. 12SQPCh. 15 - Prob. 13SQPCh. 15 - Prob. 1SQCh. 15 - Prob. 2SQCh. 15 - Prob. 3SQCh. 15 - Prob. 4SQCh. 15 - Prob. 5SQCh. 15 - Prob. 6SQCh. 15 - Prob. 7SQCh. 15 - Prob. 8SQCh. 15 - Prob. 9SQCh. 15 - Prob. 10SQCh. 15 - Prob. 11SQCh. 15 - Prob. 12SQCh. 15 - Prob. 13SQCh. 15 - Prob. 14SQCh. 15 - Prob. 15SQCh. 15 - Prob. 16SQCh. 15 - Prob. 17SQCh. 15 - Prob. 18SQCh. 15 - Prob. 19SQCh. 15 - Prob. 20SQ
Knowledge Booster
Similar questions
- In the circular flow model, households are buyers and firms are sellers in the a. government market b. monetary flows c. goods and services market d. labor marketarrow_forwardIn terms of the circular flow diagram, households make expenditures in the _____ market and receive income through the _____ market. product; financial resource; product product; resource capital; productarrow_forward· How economists are both scientists and policymakers and what process society uses to allocate its scarce resources. · Using the circular flow model, explain the flow of money and goods in an economy. · How does the economy coordinate society's independent economic actors. · A country's gross domestic product (GDP) and how it is defined and calculated. · How the consumer price index (CPI) is constructed and why it is an imperfect measurement of the cost of living.arrow_forward
- Using the circular flow model, explain what might happen to the level of income of an economy if it experiences an increase in exports and an increase in taxes.arrow_forwardExplain the circular Flow program in detail and also explain the components of GDP.arrow_forwardHow is the GDP deflator calculated? A. GDP deflator = Nominal GDP Real GDP x 100 B. GDP deflator = (Nominal GDP + Real GDP) × 100 C) GDP deflator = Real GDP Nominal GDP× 100 D. GDP deflator= (Nominal GDP - Real GDP) × 100arrow_forward
- Use the information given and show in a table format how value added method is used toCalculate GDP. 1. A forester chops down 200 trees and sells them @ N$50 each to the coal factory on a farm. The coal factory processes these trees into coals and sells the coal @ N$20 000 to the coal wholesaler’s. The coal wholesaler’s goes to the market and sell 500 bags of coal’s @N$100 each to pick n Pay. Pick n Pay sells the 500 bags of coal’s @ N$150 each to its customers. According to this example, how much value added do the coals contribute to the GDP?arrow_forwardDistinguish between the following concepts as they apply to Elements of Macroeconomics. Give examples to support your answers a. GDP Deflator and Consumer Price Indexb. GDP at Market Price and GDP at Factor Coarrow_forwardThe income based GDP formula states that GDP is the sum of wages, rent, and interest, and in a given economy. A) commodities b) profits c)taxes d)tarrifsarrow_forward
- Thoroughly explain the components of GDP and relate those components to the Circular Flow model with government and international trade.arrow_forwardSuppose the economy of Ausland's spending for the year can be described by the table below: Household Consumption $450 Government Spending on Transfer Payments $80 Imports $50 Government Spending on Public Goods and Services $200 Business Purchases of New Capital Goods $120 Net Exports $150 Government Tax Revenue $95 Sale of Existing Houses $115 What is the value of Gross Domestic Product (GDP) for Ausland? Select one: a. $1115 b. $870 c. $920 d. $1000arrow_forward
arrow_back_ios
arrow_forward_ios
Recommended textbooks for you
Economics (MindTap Course List)EconomicsISBN:9781337617383Author:Roger A. ArnoldPublisher:Cengage Learning
Macroeconomics: Private and Public Choice (MindTa...EconomicsISBN:9781305506756Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. MacphersonPublisher:Cengage Learning
Economics (MindTap Course List)
Economics
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Cengage Learning
Macroeconomics: Private and Public Choice (MindTa...
Economics
ISBN:9781305506756
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:Cengage Learning