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Suppose that an economy consists of only two individuals. Jeremy has $1890 available to spend on goods. He decides to purchase $390 worth of produce from Krista in the current quarter. No other economic activity takes place during the current quarter. Using this information, answer the questions.
Suppose that an economy consists of only two individuals. Jeremy has $1890 available to spend on goods. He decides to purchase $390 worth of produce from Krista in the current quarter. No other economic activity takes place during the current quarter. Using this information, answer the questions.For the current quarter, what is the economy's income? $_____________
For the current quarter, what is the economy's expenditure? $_____________
In an economy, how are income and expenditure related?
a. Income is less than expenditure.
b. They are equal.
c. They are unrelated.
d. Income is greater than expenditure.
Final answer:In asimplifiedtwo-person economy, the economy's income and expenditure are represented by the same transaction. In this example, both are $390. Furthermore, income and expenditure are equal in an economy as each transaction's expenditure becomes someone else's income.Explanation:In a two-person economy as described, theeconomy's incomeandexpenditureare both represented by the transaction between Jeremy and Krista. In this case, Jeremy's purchase of $390 worth of produce from Krista is regarded as an income for Krista and an expenditure for Jeremy. Thus, the economy’s income and the economy's expenditure are both$390.The relationship between income and expenditure falls under option(b) They are equal. This is because in every transaction like the one between Jeremy and Krista, the amount spent on goods or services (expenditure) is received as income by someone elsewhere in the economy.Learn more about Economy's income and expenditure here:brainly.com/question/32523516#SPJ2...