Question

In-Class Activity #4 Circular Flow Diagram: A: B: F: G: H: D: what is the value for "I" in the circular flow diagram, if A-$10, B-$25, С = 12, D-ss, and E-57?

Answer 1

Filling the circular flow diagram, we get:

Government Borrowing Government Spending Government Government enacts new legislation to improve water conditions by reducing pollution output. Consumer Spending Private Savings Household * Households have clean water; people can continue living and Income purchase goods. Factors of Production Product Market Factor Market Goods and Services Financial Markets Business Costs Business Revenue Business Borrowing and Stock Issues by Firms Imports Goods and Sonrico Businesses are able to sell to living, healthy humans. Local economy prospers with healthy vegetation and habitats for fauna attracts tourists. Exports Foreign Borrowing and Selling Stocks Rest of the World Foreign Lending and Purchasing Stocks World can import high quality oranges rich in vitamin C, and also have a place to vacation when the need arises

Here A = govt spending = 10

B = consumer spending = 25

C = Goods and services = 12

D = Imports = 5

E = Exports = 7

I = Income = consumer spending + Goods and services + govt spending + (Exports - Imports)

= 25 + 12 + 10 + (7-5) = 49