Without foreign trade, the dollars used to buy goods and services are included in the circular flow as consumption, investment, and government spending.
Answer the following statement true (T) or false (F)
True
As income is used to buy goods and services, the money spent is counted as consumption, investment, and government spending in the circular flow.
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Which of the following makes the Consumer Price Index a less accurate measure of the cost of living?
i. The monthly price survey conducted to collect information about prices is very unreliable. ii. The existence of a new goods bias in the calculation of the CPI iii. The existence of a quality change bias in the calculation of the CPI A) i, ii, and iii B) i and ii C) i only D) ii only E) ii and iii
At __________ income levels on the LM curve, the interest rate must be __________
A) higher; lower B) lower; higher C) higher; unchanged D) higher; higher
The three questions every economic system must answer must include which of the following?
a. Where the goods and services should be produced? b. What goods and services should be produced? c. Who should produce the goods and services? d. All of the questions must be answered for the economic system to work.
Using Figure 9.1, the amount of autonomous consumption is
A. $500 billion. B. Equal to disposable income when the consumption line crosses the 45-degree line. C. Different at every income level. D. $750 billion.