d. Does the total flow of money out of households- the sum of taxes paid, consumer spending, and private savings-equal the total flow of money into households? e. How does the government finance its...

Extracted text: d. Does the total flow of money out of households- the sum of taxes paid, consumer spending, and private savings-equal the total flow of money into households? e. How does the government finance its spending?


Extracted text: Government purchases of goods and services $150 Government borrowing $60 Government Taxes = $100 Government transfers = $10 %3D Private savings = $200 %3D Consumer Wages, profit, interest, rent = $800 Households spending = $510 Markets for goods and services Factor Financial markets markets Gross Wages, profit, interest, rent = $800 domestic Borrowing and stock issues by firms = $110 product %3D %3D Firms Investment spending = $110 %3D Foreign borrowing and sales of stock = $130 Exports = $50 %3D Rest of world Foreign lending and purchases of stock = $100 Imports = $20 %3D