(Solved): 5. The circular flow of income and expenditure The income and expenditure approaches to measuring a ...

5. The circular flow of income and expenditure The income and expenditure approaches to measuring a nation's GDP can be combined using the circular flow model. Categorize each of the following flows as part of either aggregate expenditure or aggregate income. While aggregate income and aggregate expenditure must be equal, income must also equal expenditure for each of the five sectors in the circular flow diagram: firms, households, governments, financial markets, and the "rest of the world". For example, the amount of. fowing into the government sector must equal the amount of flowing out of this sector. Categorize each of the following flows as either injections into the circular flow or leakages from the circular flow. Q \( W \) I E R A (1) \( \mathrm{N} \) While bogregate incotte and bapregste ogenstare munt be equa, incent nust abo equal expon dagrami firms, housetides, govertments, feascal inarksts, and the "res of the world". For exame fewing ints the government sector muat esual the - fowing eut of this wectse to the crciular fow or lealrages frim th