What flows to households in a factor market?
a. payments for finished products
b. goods and services
c. payments of rent and wages
d. technology and machinery
c. payments of rent and wages
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If producers incorrectly set the price of their product too low:
A. a shortage will result. B. a surplus will result. C. equilibrium will result. D. the industry will die out soon.
In international trade the concept of 'relative opportunity cost' refers to
A) absolute advantage. B) comparative advantage. C) technical costs. D) institutional advantage.
Which of the following correctly describes the relationship between private-sector spending and the federal budget?
a. A decline in private-sector spending reduces the demand for government services, that reduces fiscal outlays and contributes to a budget surplus. b. An increase in private-sector spending must be matched by increase in government spending. This increases fiscal outlays and contributes to a budget deficit. c. A decline in private-sector spending triggers automatic stabilizers that result in a federal budget deficit. d. An increase in private-sector spending must be matched by increase in government spending. This increases fiscal outlays and contributes to a balanced budget.
Why might monetary policy authorities be concerned when non-bank financial intermediaries account for a growing share of an economy's financial assets?
A) Monetary policy authorities fear that this situation might erode the value of the U.S. dollar in foreign exchange markets. B) Monetary policy authorities are concerned that this situation might promote income inequality since high income individuals are more likely to use the services of non-bank financial intermediaries, compared to low-income individuals. C) Monetary policy authorities fear that this situation might lessen their ability to control money supply because non-bank financial intermediaries are not as heavily regulated as banks D) It will be more difficult for monetary policy authorities to monitor those assets that are most closely related to the level of economic activity.