All of the following are examples of spending on goods and services in the circular flow model except
A) Chaitanya buys a new spa pedicure chair for her expanding nail salon business.
B) Hernan buys a pizza at Papa C's.
C) Lenny buys a new digital camera to take pictures at his son's graduation.
D) Amanda purchases a new electric guitar to pursue her hobby seriously.
A
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If additional information is not used when forming an optimal forecast because it is not available at that time, then expectations are
A) obviously formed irrationally. B) still considered to be formed rationally. C) formed adaptively. D) formed equivalently.
The permanent-income hypothesis seeks primarily to explain the
A) observed long-term constancy of the saving ratio. B) observed variation in the short-term saving ratio. C) unimportance of transitory income changes. D) All of the above are correct.
According to the classical model shown above, an autonomous decline in investment shifts the investment schedule to the left. Furthermore, the equilibrium interest rate declines. Distance A describes an interest rate induced
a. decline in saving, which is an equal increase in consumption. b. increase in investment. c. decrease in investment. d. decline in saving, which exceeds the increase in consumption.
When government expenditures exceed government revenues a budget surplus will exist
Indicate whether the statement is true or false