1. The economy's income and expenditure The following diagram presents a circular-flow model of a simple economy. The outer set of arrows {shown in green) shows the flow of dollars, and the Inner set of arrows (shown in red] shows the corresponding Flow of Inputs and outputs. warm Based on this model, households earn inoome when firms v purchase labor and capital v In markets for factors of production. Suppose Eileen earns $500 per week working as a corporate attorney for Rowan and Martin Associates. She uses $8 to buy a box of aspirin at Pillmart Pharmacy. Pillmart Pharmacyr pays Clancy $250 per week to work the cash register. Clanm.r uses $350 to purchase legal service from Rowan and Martin Associates. Identify whether each of the following events in this scenario occurs in the market for factors of production or the market for goods and services. Event Market for Factors of Production Market for Goods and Services Clancy earns $250 per week working for Pillmart Pharmacy. O Q) Eileen earns $500 per week working for Rowan and Martin Associates. O Q) Eileen spends $8 to buy a box of aspirin. Q) Q Which of the elements of this scenario represent a flow from a household to a firm? This could be a flow of dollars, inputs, or outputs. Check all that apply. Eileen's labor The $350 Clancy spends to purchase legal service from Rowan and Martin Associates [3 The aspirin Eileen receives True or False: Gross domestic product (GDP) measures total expenditures on nal goods and services during a given period of time. True 0 False