Question

The figure shows the flows of expenditure and income in an economy In 2008, J was $2.5 trillion Rwas $2.0 trillion. Z was 1.5

0 0
Add a comment Improve this question Transcribed image text
Answer #1

As per the information provided in the question

Investment (J) =$2.5 trillion

Tax paid to Government (R) =$2.0 trillion

Demand from rest of the world (Z) or Export =$1.5 trillion

Import (not given) = 0

Factor income received by household (Q) =$11.0 trillion

Government expenditure (U) =$1.0 trillion

In a four sector economy, the economy will be at equilibrium level when

Savings + Tax paid to Government + Import = Investment + Government expenditure + Export

Savings + $2.0 + 0 = $2.5 + $1.0 + $1.5

Savings + $2.0 = $5.0

Savings = $5.0 - $2.0 = $3.0 trillion

Savings = $3.0 trillion

Factor income received by household = Consumption Expenditure + savings + Tax paid to Government

Consumption Expenditure = Factor income received by household – (savings + Tax paid to Government)

Consumption Expenditure = $11.0 – ($3.0 + $2.0) =$11.0 - $5.0 = $6.0 trillion

Consumption Expenditure = $6.0 trillion

Add a comment
Know the answer?
Add Answer to:
The figure shows the flows of expenditure and income in an economy In 2008, J was...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • This Question: 1 pt 15 of 30 The figure shows the flows of income and expenditure...

    This Question: 1 pt 15 of 30 The figure shows the flows of income and expenditure in an economy In 2008, Q was $1,200 billion, U was $200 billion Wwas $650 billion, Rwas $150 billion and Z was $75 billion WAN Calculate investment and saving Investment is $275 billion Saving is S 350 billion FACIO Enter your answer in each of the answer boxes Save for Later G SW TUR RE Aramak için buraya yazin mort se delete + 2...

  • me figure shows the flows of expenditure and income in Brittania. uring 2016, B was $317...

    me figure shows the flows of expenditure and income in Brittania. uring 2016, B was $317 billion, C was $73 billion, was $77 billion, and E was - $18 billion HOUSEHOLDS GOVERNMENTS n the figure, consumption expenditure is represented by the flow labeled nvestment is represented by the flow labeled government expenditure is represented by the flow labeled and net ports is represened by the flow labeled FACTOR MARKETS DOODS MARKETS billion. Р During 2016, aggregate income was $ GDP...

  • Aggregate expenditure is total value added in the economy income of households, businesses, governments, and foreigners....

    Aggregate expenditure is total value added in the economy income of households, businesses, governments, and foreigners. revenue from the sale of goods and services. spending on final goods and services. The MPC can be defined as the change in consumption divided by the change in income. change in income divided by the change in consumption. ratio of income to saving. ratio of saving to consumption. The relationship between the MPS and the MPC is such that MPC - MPS =...

  • Macroeconomics Assignment 2 1. The table shows disposable income and consumption expenditure in an economy. Use...

    Macroeconomics Assignment 2 1. The table shows disposable income and consumption expenditure in an economy. Use the table to work Problems A and B. Disposable Consumption income expenditure (Billions of dollars) 800 1,000 A. Calculate saving at each level of disposable income. Over what range of disposable income does consumption expenditure exceed disposable income? Calculate autonomous consumption expenditure. B. Calculate the marginal propensity to consume. At what level of disposable income will savings be zero? If expected future income increases,...

  • The table shows some of the items in an economy's National Income and Product Accounts. Amount (trillions of dollars) C...

    The table shows some of the items in an economy's National Income and Product Accounts. Amount (trillions of dollars) Calculate the difference between GDP, GNP and national income. Item Wages Government expenditure Interest, rent, and profit Consumption expenditure 6.3 2.0 >>> lf an answer is negative, include a minus sign. If an answer is positive, do not include a plus sign 25 7.7 GDP minus GNP is S trillion Investment 1.6 Net exports Indirect taxes less subsidies Retained profits Transfer...

  • The table shows real? GDP, Y?, consumption? expenditure, C?, ?investment, I?, government expenditure on goods and?...

    The table shows real? GDP, Y?, consumption? expenditure, C?, ?investment, I?, government expenditure on goods and? services, G?, ?exports, X?, ?imports, M?, and aggregate planned? expenditure, and AE?, in millions of dollars. Taxes are constant. If investment crashes to? $0.55 trillion but nothing else? changes, what is equilibrium expenditure and what is the? multiplier? Homework: Chapter 14 Save Score: 0 of 1 pt 17 of 25 (19 complete) HW Score: 76%, 19 of 25 pts Chapter Problem5 Question Help *...

  • The circular flow model shows the O A. distribution of income to the different factors of...

    The circular flow model shows the O A. distribution of income to the different factors of production O B. combinations of the factors of production needed to produce goods and services. O C. flow of expenditure and incomes that arise from the households', firms, and governments' decisions. OD. distribution of income and consumption goods across income levels. O E. flow of natural resources from firms to the private market to government and back to firms,

  • The following table shows the relationship between aggregate planned expenditure and real GOP in the hypothetical...

    The following table shows the relationship between aggregate planned expenditure and real GOP in the hypothetical economy of Econoworld Real GDP bbons of 2007 dollars) Aggregate planned expenditure (billions of 2007 dollars) 100 200 300 420 1131 The level GPS 580 740 Ол ееn O Canadians' Wealth Rises Canadian net saving in the first quarter of 2017 was 522 billion Holdings of financial assets increased by 5162 bilion and the value of shares in corporations increased by $113 billion Explain...

  • The table shows some of the items in an economy's National Income and Product Accounts. Amount...

    The table shows some of the items in an economy's National Income and Product Accounts. Amount (trillions of dollars) Item Wages Calculate the difference between GDP, GNP, and national income >>> If an answer is negative, include a minus sign. If an answer is positive, do not include a plus sign. GDP minus GNP is S trillion. >>> Answer to 1 decimal place. Government expenditure Interest, rent, and profit Consumption expenditure Investment Net exports Indirect taxes less subsidies Retained profits...

  • The diagram below shows the circular flow of expenditure and income for the economy of Gheda....

    The diagram below shows the circular flow of expenditure and income for the economy of Gheda. 8. HOLDS GOVERNMENTS FACTOR MARKETS GOODS MARKET REST OF WORLD IRMS During 2015, A was $100, B was $50, C was $30, and D was $10. What was the GDP of Gheda in 2015? aj. $75 ak. $50 al. $90 am. $100 an. $30

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT