Below is a simplified circular-flow diagram for the economy of Micronia.

1. What is the value of GDP in Micronia?
2. What is the value of net exports?
3. What is the value of disposable income?
4. Does the total flow of money out of households- the sum of taxes paid and consumer spending-equal the total flow of money into households?
5. How does the government of Micronia finance its purchases of goods and services?

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Government purchases of goods and services $100 Taxes $100 Households Consumer spending $650 Wages, profit, interest, rent $750 Markets for goods and services Factor markets Gross domestic product Wages, profit, interest, rent-$750 Firms Exports = $20 Rest of world Imports $20