STA 3032 Study Guide - Delaware Route 1
8 Oct 2014
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1 using the model provided in the lesson, draw (by hand) and label the circular flow for the islands" economy. 2 explain how money (increased commerce) spent by tourists in the macro. Islands moves through the economy"s circular flow diagram (in fewer than 150 words). Make sure that each market and the government are included in your explanation. The revenue brought into the macro islands from the tourists first impacts the product market which affects the firms receive this as an income. Government takes the business taxes which in turn allow for government services for he firms. Firms may then borrow money and pay interests to a financial market. This income also allows for the resource market to provide the firms resources through business costs to produce goods and services, which affects the households. The households then receive income from the resource market and again the government takes personal taxes also allowing for government services for the households.
