The circular flow diagram of economic activity is a model of the:
A. flow of goods, services, and payments between households and firms.
B. influence of government on business behaviour.
C. role of unions and government in the economy.
D. interaction among taxes, prices, and profits.
A. flow of goods, services, and payments between households and firms.
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If the market price of oats is $2.5 per bushel and a farmer decides to sell at $2.8 per bushel, he is likely to sell:
a. more than 5 bushels per day. b. more than 10 bushels per day. c. less than 5 bushels per day. d. 10 bushels per day. e. nothing.
Do policy makers know the level of unemployment that is associated with "full employment"?
a. Yes, economists have the precise level of unemployment that is full employment. b. Yes, although there is a small range of uncertainty in this measure. c. No, economists have no idea what this level of unemployment is. d. No, this number is not known with complete accuracy.
Other things the same, as the maturity of a bond becomes longer, the bond will pay
a. a lower interest rate because it has less risk. b. a lower interest rate because it has more risk. c. a higher interest rate because it has more risk. d. the same interest rate, because there is no relationship between term and risk.
An increase in the saving rate will not affect which of the following variables in the long run?
A) output per worker B) the growth rate of output per worker C) the amount of capital in the economy D) capital per worker E) none of the above