The circular flow model shows the
A) distribution of income and consumption goods across income levels.
B) combinations of the factors of production needed to produce goods and services.
C) flow of expenditure and incomes that arise from the households', firms', and governments' decisions.
D) flow of natural resources from firms to the private market to government and back to firms.
E) distribution of income to the different factors of production.
C
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Which of the following would cause prices to rise and real GDP to fall in the short run?
a. an increase in the expected price level b. an increase in the capital stock c. an increase in the quantity of labor available d. All of the above are correct.
Short-run expansionary Fiscal Policy would result in
A. aggregate demand moving to the left. B. aggregate supply moving to the left. C. aggregate supply moving to the right. D. aggregate demand moving to the right.
Your roommate has the right to play her harmonica during the day. But you find the best time to study is during the day, and the harmonica playing makes it hard for you to concentrate. You tell your roommate that you will do her laundry every week if she does not play the harmonica during the day and she agrees to this. This is an example of
A. the Coase theorem. B. liability rules. C. the drop-in-the-bucket problem. D. an injunction.
A situation in which output decreases while prices increase is often referred to as:
A. inflation. B. negative economic growth. C. a recession. D. stagflation.