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At right is a simplified circular-flow diagram for the economy of Micronia. (Note that there is no investment in Micronia.) a. What is the value of GDP in Micronia? b. What is the value of net exports? c. What is the value of disposable income? d. Does the total flow of money out of households-the sum of taxes paid and consumer spending-equal the total flow of money into households? e. How does the government of Micronia finance its purchases of goods and services? | Numerade
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Use the circular flow diagram to show how each of the following government actions simultaneously affects the allocation of resources and the distribution of income: a. The construction of a new high school. b. A 2 -percentage-point reduction of the corporate income tax. c. An expansion of preschool programs for disadvantaged children. d. The levying of an excise tax on polluters. | Numerade
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