Economic models like the _____________________ are not physical models, but instead are diagrams or graphs or even mathematical equations that represent economic patterns or theories.
A. financial capital market
B. circular flow diagram
C. financial investment market
D. Specialization Model
B. circular flow diagram
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If the value of a government-taxation multiplier is 1.8, which of the following is likely to be true if all other variables remain unchanged?
A) A $1.80 increase in taxation increases gross domestic product by $1.80. B) A $1 reduction in taxation increases gross domestic product by $1.80. C) A $1 increase in taxation increases gross domestic product by $1.80. D) A $1.80 reduction in taxation increases gross domestic product by $1.80.
Holding other things constant, decreases in the price level in the US will
a. Cause the dollar to appreciate b. Cause the dollar to depreciate c. Cause no change in dollar value d. None of the above
Consider borrowers and lenders who agree to loans with fixed nominal interest rates. If inflation is higher than what the borrowers and lenders expected, then who benefits from lower real interest rates?
A. Only the borrowers benefit. B. Only the lenders benefit. C. Both borrowers and lenders benefit. D. Neither borrowers nor lenders.
Which of the following describes how a negative externality affects a competitive market?
A) The externality causes a difference between the private cost of production and the social cost. B) The externality causes a difference between the private cost of production and the private benefit from consumption. C) The externality causes consumer surplus to exceed producer surplus. D) The externality causes a difference between the private cost of production and the equilibrium price.