The circular flow diagram validates the fact that the different sectors in the economy are independent
a. True
b. False
Indicate whether the statement is true or false
False
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The most significant problem in trying to empirically measure the real rate of interest is that
A) there are so many different types of bonds. B) expected inflation is unobservable. C) interest rates fluctuate so much from day to day. D) banks infrequently change the prime rate of interest.
The above figure shows a graph of the market for pizzas in a large town. At a price of $5, there will be
A) excess demand. B) excess supply. C) equilibrium. D) zero demand.
During the English civil war in the 1640s, the _____ made great inroads into the carrying trade
a. Italians b. Dutch c. Spanish d. French
The idea that aggregate price levels do not affect real outcomes in the economy is called the:
A. neutrality of money. B. aggregate price theory. C. neutrality of prices. D. real output theory.