Circular flow of income

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Question 7
Easy

The diagram below illustrates the circular flow of income for an open economy with government.

Circular Flow of Income

Suppose that the macroeconomic data for this economy over a given financial year is recorded as follows:

  • Household Savings (SSS) = £42bn
  • Government Taxation (TTT) = £56bn
  • Spending on Imports (MMM) = £38bn
  • Planned Investment (III) = £48bn
  • Government Expenditure (GGG) = £52bn

If the economy is in circular flow equilibrium, what is the value of Exports (XXX)?

£26bn

£36bn

£40bn

£46bn

Circular flow of income Questions

  1. A Level
  2. /Economics
  3. /Circular flow of income