In the circular-flow diagram, firms consume all the goods and services that they produce
a. True
b. False
Indicate whether the statement is true or false
False
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Which of the following is a fixed cost for ACME manufacturing?
A) wages paid to labor B) the annual fire and theft insurance premiums C) the utility bill D) raw material costs E) the cost of shipping its product to market
The marginal propensity to consume is 0.75, marginal propensity to invest is 0.3, and the marginal propensity to import is 0.2. What is the size of the multiplier?
A) 6.67 B) 5.67 C) 4.67 D) 1.67
If a bank needs to raise the amount of capital relative to assets, a bank manager might choose to
A) buy back bank stock. B) pay higher dividends. C) shrink the size of the bank. D) sell securities the bank owns and put the funds into the reserve account.
Tariffs and quotas are used to promote trade with foreign countries
Indicate whether the statement is true or false