MACROECONOMICS (LOOSELEAF)-PACKAGE
13th Edition
ISBN: 9781337492317
Author: Baumol
Publisher: CENGAGE L
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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
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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
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c1T+I+G+NX
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Y
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Y
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Y
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Y
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Y
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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 (LOOSELEAF)-PACKAGE
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