Macroeconomics + Economy 2009 Update 18th Edition by Campbell McConnell, Sean Masaki Flynn,Stanley Brue

Exercise 14

Use the circular flow diagram to show how each of the following government actions simultaneously affects the allocation of resources and the distribution of income:
a. The construction of a new high school.
b. A 2-percentage-point reduction of the corporate income tax.
c. An expansion of preschool programs for disadvantaged children.
d. The levying of an excise tax on polluters.