Which of the following are leakages from the circular flow of income?
a. Savings, taxes, and imports
b. Investment, government purchases, and exports
c. Investment, taxes and bonds
d. Imports, wages and taxes
A
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If the government wants to minimize the welfare loss of a tax, it should tax goods with more inelastic demands or supplies
Indicate whether the statement is true or false
If the equilibrium price of corn is $3 a bushel and the government imposes a floor of $4 a bushel, the price of corn will _______________________.
A. Increase to $4 B. Remain at $3 C. Rise to about $3.50 D. Be impossible to determine
The slope of the aggregate demand curve illustrates that real GDP demanded will increase when
A. the price level rises. B. the price level falls. C. real income rises. D. real income falls.
When the Fed increases the money supply, interest rates:
A. rise. B. fall. C. are unaffected. D. rise and then fall.