The income and expenditure approaches to measuring a nation\'s GDP can be combin
ID: 1213546 • Letter: T
Question
The income and expenditure approaches to measuring a nation's GDP can be combined using the circular flow modes. Categorize each of the following flows as part of either aggregrate expenditure or appropriate income. While aggregrate income must equal aggregate expenditure, income must also equal expenditure for each of the five sectors in the circular dflow diagram: firms, households, governments, financial markets, and the "rest of the world." For example, in the household sector, the amount flowing into hte sector, or, must equal the amount flowing out of the sector, or. Categorize each of the following flows as either injectors into the circular flow or lekages from the circular flow.Explanation / Answer
Answers:
Item
AE
AI
Investment
yes
Net exp[orts
yes
Government Purchases
yes
Net Tax
yes
Disposable income
Yes
Consumption
Yes
B) For example in the household sector, the amount flowing into the sector OR the Disposable Income must equal the amount flowing out Or the CONSUMPTION of the sector.
Item
Injections
Leakages
Saving
Net Taxes
Exports
Investment
Government purchases
Imports
Item
AE
AI
Investment
yes
Net exp[orts
yes
Government Purchases
yes
Net Tax
yes
Disposable income
Yes
Consumption
Yes
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.