Circular flow model to confirm this assertion
Use the circular flow model to confirm this assertion for the construction of a new high school in Blackhawk county?
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In building the school, the effect would be an increase in government expenditures to the product market and an increase in business revenues. The owners of the resources used to building the school will have an increase income. Resources will be diverted away from the private sector. To pay for the high school, taxes may have to be increased. If the economy is experiencing unemployment, the increase in government spending may increase total output and employment.
What happens in the product markets?
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