If the economy goes into a recession and incomes fall, what happens in the markets for normal goods?
A. Equilibrium price and quantity both rise.
B. Equilibrium price and quantity both fall.
C. Equilibrium price falls, and the quantity rises.
D. Equilibrium price rises, and the quantity falls.
Ans: B. Equilibrium price and quantity both fall.
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Keynesians argue that the crowding-out-effect is rather insignificant. True or False
In the circular flow model of the market system, business firms
A. buy products and resources. B. buy products and sell resources. C. sell products and resources. D. sell products and buy resources.
Refer to the information provided in Table 36.2 below to answer the question(s) that follow. Table 36.2 PointAggregate Income (Y)Aggregate Consumption (C) A 10 14 B 20 23 C 30 25 D 40 26 E 50 34 F 60 39The data in the table was used to estimate the following consumption function: C = 12 + 0.4YRefer to Table 36.2. The error for point A is equal to
A. -3. B. -2. C. +2. D. +3.
Answer the following statements true (T) or false (F)
1 . U.S. gross domestic product (GDP) measures the market value of all goods and services produced by Americans in one year. 2. A product that was produced in 2013 and not sold until 2014 is counted as part of GDP in 2013. 3. The value added in an industry includes the wages earned by workers in the industry. 4. The value of a sale of a share of stock is considered to be an investment in national income accounting. 5.Gross private domestic investment can be divided into replacement investment and net investment.