The circular flow diagram implies that if accounting is done correctly, ________
A) the flow of income must exceed the implied value of the factors of production
B) the implied value of the factors of production must exceed the flow of income
C) the flow of expenditure must equal the income of the households making those expenditures
D) the flow of expenditure must exceed the income of the households making those expenditures
C
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Regulating a monopolistically competitive market:
A. is easier than regulating a monopoly. B. is more difficult than regulating a monopoly. C. is very common in the U.S. today. D. has grown over the past 50 years.
If the monetary authorities persistently expand the money supply at a rapid rate, the probable result will be: a. inflation
b. low nominal interest rates. c. rapid growth of real GDP. d. all of the above.
Which term describes the situation in which a country that can consume more than it can produce as a result of specialization and trade?
a. comparative advantage b. absolute advantage c. gain from trade d. trade advantage
According to liquidity preference theory, a decrease in money demand for some reason other than a change in the price level causes
a. the interest rate to fall, so aggregate demand shifts right. b. the interest rate to fall, so aggregate demand shifts left. c. the interest rate to rise, so aggregate demand shifts right. d. the interest rate to rise, so aggregate demand shifts left.