In the expanded circular flow diagram, the rest of the world interacts directly with:

A. households.
B. firms.
C. product markets.
D. factor markets.


Answer: C

Economics

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Suppose that Paraguay can produce 12 wheat or 3 corn and Bolivia can produce 4 wheat or 2 corn. Suppose that opportunity costs are constant. Which of the following is a potentially agreeable trade arrangement for Paraguay and Bolivia?

A) Paraguay trades one corn to Bolivia for three units of wheat. B) Bolivia trades one corn to Paraguay for three units of wheat. C) Bolivia trades one corn to Paraguay for one wheat. D) Paraguay trades one wheat to Bolivia for two corn.

Economics

If the U.S. dollar appreciates in value relative to foreign currencies, then this will:

A. decrease aggregate supply. B. increase aggregate supply. C. cause a movement along the aggregate demand curve. D. increase aggregate demand.

Economics

Suppose that you are a manager. You are considering whether or not to monitor employees with the payoffs in the normal-form game shown below.ManagerWorker??WorkShirk?Monitor-1,11,-1?Don't Monitor1,-1-1,1Which of the following pairs of strategies constitutes a Nash equilibrium?

A. Manager monitors and worker shirks. B. Manager does not monitor and worker works. C. Manager monitors and worker works. D. None of the answers is correct.

Economics

Which of the following transactions is included in GDP?

A. buying and selling of stocks and bonds B. government transfer payments C. the sales of houses produced in that given year D. sales of used goods

Economics