GDP increased at an annual rate of 0.7 percent in the final quarter of 2015. Government expenditure grew at the same 0.7 percent rate, but consumption expenditure grew at a rate of 2.2 percent. Investment and net exports shrank.

Use Figure 1 to indicate the flows in which the items in the news clip occur. How can GDP increase by 0.7 percent if consumption expenditure increased at a 2.2 percent rate?

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FIGURE 1 FACTOR MARKETS HOUSEHOLDS R GOVERNMENTS FIRMS V W FINANCIAL MARKETS GOODS MARKETS Z REST OF WORLD