The diagram below presents a circular-flow model of a simple economy. The outer
ID: 1244418 • Letter: T
Question
The diagram below presents a circular-flow model of a simple economy. The outer set of arrows shows the flow of money, and the inner set of arrows shows the corresponding flow of inputs and outputs. Assume that all goods and services are bought by households and that households spend ail of their income. Firms earn revenue when ____ purchase _____ in ___. Consider the following story: Laura earns $500 per week working as a programmer for Microsoft. She uses $300 to draw up a will at Rowan and Martin Associates. Rowan and Martin Associates pays Jonas $800 per week to work as a corporate attorney. Jonas uses $200 to purchase software from Microsoft. Which of the following events in this story occur in markets for goods and services? Check all that apply. Jonas earns $800 per week working for Rowan and Martin Associates. Laura earns $500 per week working for Microsoft. Laura spends $300 to draw up a will. Jonas spends $200 to purchase software from Microsoft. Which of the following elements of this story represent a flow of money, inputs, or outputs from a household to a fîrm? Check all that apply. The legal service Laura receives The $800 per week Jonas earns working for Rowan and Martin Associates The $200 Jonas spends to purchase software from Microsoft Laura's labor Gross domestic product (GDP) measures which of the following from the circular flow diagram? Check all that apply. The economy's flow of money Total income, including wages, profits, and rents, paid by firms Total expenditures by households on goods and servicesExplanation / Answer
1) Firms earn the money when the house holds purchase the Goods andservices in the market.
2) Laura spends $300 todraw up a will
Jonas spends $200 to to purchase softawre formMicrosoft.
3)
Jonas spends $200 to to purchase softawre formMicrosoft.
4) The economy's flow ofmoney