In a circular flow diagram,
i. the value of production = income.
ii. the value of production = expenditure.
iii. expenditure = income.
A) i and ii are true statements.
B) i and iii are true statements.
C) Only iii is a true statement.
D) Only i is a true statement.
E) i, ii and iii are true statements.
E
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If the firms in a market have constant returns to scale internally while there are external economies of scale for the industry, a firm's long-run supply curve will be ________ and the long-run market supply curve will be ________
A) downward sloping; downward sloping B) upward sloping; horizontal C) horizontal; downward sloping D) downward sloping; horizontal E) upward sloping; downward sloping
_____ is (are) the buying and selling of U.S. government securities.
a) The discount rate b) The federal funds rate c) Reserve requirements d) Open market operations
Classical economists believed that
A. if saving exceeded investment, prices and interest rates would rise as business accumulated unwanted inventories. B. flexible prices and wages could not restore an economy to full employment if the interest rate were rigid. C. flexible interest rates, wages, and prices would assure full employment. D. voluntary unemployment reflected economic inefficiency.
The substitution effect is the change in the quantity demanded of a good that results from
a. the effect of a change in the price on consumer purchasing power. b. the effect of a change in the price making the good more or less expensive relative to other goods, holding constant the effect of the price change on consumer purchasing power. c. either a or b d. none of the above.