One of the major points of the circular flow diagram is:

a. If GDP rises due to increased production, incomes earned from producing GDP must rise.
b. Increasing gross private domestic investment is the best way for a nation to grow.
c. Increasing government spending is the best way for a nation to grow.
d. The top and bottom flows are proof that most economies should always be in equilibrium.
e. None of the above.


.A

Economics

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Which of the following observations is true?

A. TFC remains the same irrespective of units of output produced. B. TVC remains the same irrespective of units of output produced. C. TVC falls as the unit of output increases. D. AFC increases as output increases further and further.

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What would be a way for the Federal Reserve to slow down the economy when it is growing too quickly or is inflationary?

A) print more money B) encourage the stock market C) sell more government bonds D) buy back government bonds on the open market

Economics

Using the specific factors model, assume that strawberry production requires the specific factor of land, tractor production requires the specific factor of capital, and labor is variable

If the United States is capital abundant compared to Mexico, and Mexico is land abundant compared to the United States, then in the short run with trade we would expect A) the income of U.S. land owners to increase. B) the income of U.S. workers to increase. C) the income of Mexican workers to increase. D) the income of Mexican land owners to increase.

Economics

According to the Coase approach, to achieve socially optimal outcome, two sides must bargain. The bargaining might not be successful because

A) transaction costs are ignorable. B) firms engage in strategic bargaining. C) both sides have perfect information. D) None of the above.

Economics