In economics, a circular flow model is a diagram that is used to represent the monetary transactions in an economy.
National income, output, and expenditure are generated by the activities of the two most vital parts of an economy, its households and firms, as they engage in mutually beneficial exchange.
Households
The primary economic function of households is to supply domestic firms with needed factors of production - land, human capital, real capital and enterprise. The factors are supplied by factor owners in return for a reward. Land is supplied by landowners, human capital by labor, real capital by capital owners (capitalists) and enterprise is provided by entrepreneurs.<span> Entrepreneurs combine the other three factors, and bear the risks associated with production.</span>
In cross sectional research, a researcher compares multiple segments of the population at the same time.
<h3>What is cross sectional research?</h3>
It is a type of research design in which data are collected from many different individuals or segments.
This data are analyzed at one specific point and time.
Therefore, a cross sectional researcher compares multiple segments of the population at the same time.
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Answer:
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Answer:
The equilibrium quantity of loanable funds to rise and the equilibrium interest rate to fall.
Explanation:
In order to understand this question,let us define one or two terms in the question. I will start with net tax. So, what is net tax?.
Net taxes shows how or is a measurement of how taxes flows in and how taxes flows out . Assuming in a specific country, let us say country A collected taxes which amounts to $5 billion in the year 2018 and in that same year the country spent $4 billion on expenditures and things like that, then the net taxes = $5 billion - $4 billion = $1 billion.
So, let us go back to the question. We are told that the expenditures on goods and services and net taxes both decrease and expenditures fall by more than net taxes the effect of this on budget deficit is that the equilibrium interest rate falls.
