The figure given below represents the circular flow of income between households, firms, financial intermediaries, and foreign countries. Figure 4.2 Refer to Figure 4.2.What is the total savings of the household sector?
A)$35, 000
B)$25, 000
C)$17, 500
D)$42, 500
E)$45, 000

Question

The figure given below represents the circular flow of income between households, firms, financial intermediaries, and foreign countries. Figure 4.2  Refer to Figure 4.2.What is the total savings of the household sector?
A)$35, 000 
B)$25, 000 
C)$17, 500 
D)$42, 500 
E)$45, 000

Quizplus · Accepted Answer

The total savings of the household sector is equal to the amount of money flowing from the households to the financial intermediaries, which is $17,500. This can be seen in the figure as the arrow pointing from the households to the financial intermediaries labeled "savings".

The Figure Given Below Represents the Circular Flow of Income