The following shows the circular-flow diagram for the closed economy of Wenatche
ID: 1146064 • Letter: T
Question
The following shows the circular-flow diagram for the closed economy of Wenatchee. goods and services Taxes Government transfers Consumer Private savings Wages, profit, interest, rent Markets for goods and Factor markets Financial markets Total spending on goods and Wages, profit, interest, rent Borrowing and stock issues by firms Investment Government purchases of goods and services Government borrowing Transfers Wages, profit, interest, rent Private savings $500 $200 $100 $2900 $600 Given the information in the table above, solve for the value of consumer speding. Enter the number of dollars and no dollar sign ne ousand dollars 1000 Consumer spending-Explanation / Answer
Consumer Spending = Wages, Profits and Interests Earned by households - The Private Savings - Taxes
CS = 2900 - 600 - 0 = $2300 (The amount earned exclusive of the saings and paid taxes is the amount which the consumer has actually spend on buying goods and services and investment in the economy.