Which of the following is an example of spending on goods and services in the circular flow model?
A) Belinda purchases a new computer for her tax-preparation business.
B) Javier buys 800 square feet of wood flooring for his vacation home.
C) Celeste buys fresh herbs at the farmers' market to use in her restaurant.
D) Timmy purchases a new examination table for use in his veterinary clinic.
Answer: B
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The exchange rate is the ________.
A. market on which currencies of various nations are traded for one another B. rate at which two currencies can be traded for each other C. quantity of foreign currency assets held by a government for the purpose of purchasing the domestic currency in the foreign exchange market D. price of the average domestic good or service relative to the price of the average foreign good or service, when prices are expressed in terms of a common currency
Goods and activities typically are more highly valued the sooner they can be enjoyed, other things constant,
a. only when interest rates are positive b. because interest rates are positive c. only when people save d. because people save e. because people have positive rates of time preference
If a Cournot duopolist announced that it will double its output
A) it becomes the leader B) the other firm does not view the announcement as credible C) the other firm will shut down D) the other firm will double output also
If the forward rate is greater than the spot rate, what are markets signaling about their expectations for the future spot rates for the home currency?
What will be an ideal response?