MACROECONOMICS
14th Edition
ISBN: 9781337794985
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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This question is complete. The graph provides all the information.
Use the graph to the right to answer the following question. Which of the following is not true according to the graph?
A) Taxpayers in the top 1% of income levels paid more money in income taxes than they would have without the tax cuts.
B) The treasury estimate if the share of tax cuts had not been enacted is 34%.
C) Taxpayers in the top 1% of income levels paid a greater percentage of total federal income tax revenue than they would have without the tax cuts.
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
F11
F12
F7
F10
F8
F9
26
2
Fn
Lock
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.
NN
Z
Z
NN
Y=Z
Z
c0-
if
f
UI
i pvt
L
M
c1T+I+G+NX
i10
y
45°
if
f
if
NK
N
Y
Y
f
0
Y
X
Y
0
Y
0
Y
20
NX
N
X
E
0
E
Y NX
Fiscal stimulus
Knowledge Booster
Similar questions
- In the circular flow diagram, households get their ability to pay for their consumption expenditures from the revenues they receive for their products. costs they incur for resources. incomes they earn for their resources. goods and services they get in the product markets.arrow_forwardDraw 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.arrow_forwardExamples of all three sectors of the economy in the setences below. What are those examples exactly? Sunlight flooded the cabin as the plane changed course. It was a bright, clear morning. Robyn looked out of the window as England slid slowly by beneath them: cities and towns, their street plans like printed circuits, scattered over a mosaic of tiny fields, connected by the thin wires of railways and motorways. Hard to imagine at this height all the noise and commotion going on down there. Factories, shops, offices, schools, beginning the working day.arrow_forward
- Could you say that the consumers are a significant aspect of an economy? If so, why?arrow_forwardWhat is the importance of the circular-flow diagram?arrow_forwardTyson and Ella work at the Ruby Red Movie Theater in town. After work, they decide to watch a movie. After purchasing their tickets, they stop by the concession stand and purchase popcorn, drinks, and candy. Use the circular flow diagram to describe the purchases that Tyson and Ella made and the services and goods that were provided to them.arrow_forward
- Draw a circular-flow diagram. Identify the parts of the model that correspond to the flow of goods and services and the flow of dollars for each of the following activities. Sam pays a storekeeper $1 for a quart of milk. Sally earns $4.50 per hour working at a fast food restaurant. Serena spends $7 to see a movie. Stuart earns $10,000 from his 10 percent ownership of Acme Industrial.arrow_forward1. Draw a circular-flow diagram. Identify the parts of the model that correspond to the flow of goods and services and the flow of dollars for each of the following activities. a. Selena pays a storekeeper $1 for a liter of milk. b. Stuart earns $4.50 per hour working at a fast-food restaurant. c. Shanna spends $30 to get a haircut. d. Salma earns $10,000 from her 10% ownership of Acme Industrial.arrow_forwardAfghanistan didn't buy covid vaccine or produce covid vaccine and what is the impact to the economy? explain in diagram and 2 graphsarrow_forward
- Economics: Public Economics Question: 1 Refer to Graph 2. Suppose the TANF program is established. What is the individual’s consumption if they spent all of their time in leisure? Do not include a dollar sign when writing your answer. Guess: 10,000 (with margin: 0) Question: 2 Refer to Graph 2. For every dollar earned by the individual below the cutoff (such that they are eligible for TANF), benefits decrease by how much? Do not include a dollar sign when writing your answer. Guess: 0.5 (with margin: 0) Question 3: Which of the following types of balanced budget requirements (BBRs) are least effective in restricting deficits? a. ex post BBRs b. neither ex ante nor ex post BBRs c. both ex ante and ex post BBRs d. ex ante BBRs Thank you for your help and support Academic Agent!arrow_forwardThe table contains data on the relationship between saving and income. Rearrange these data into a meaningful order and graph them on the accompanying grid. What is the slope of the line? The vertical intercept? Write the equation that represents this line. What would you predict saving to be at the $12,500 level of income?arrow_forwardSo it’s basically asking me to look at the plots of the grid?arrow_forward
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