In the circular flow model,
A. households buy goods and services while firms sell goods and services. Firms obtain labor from households, capital from government, and raw materials from firms.
B. households buy goods and services and firms supply goods. Resources are supplied by other firms.
C. households demand goods and services that are supplied by firms, while supplying resources that are demanded by firms.
D. households demand goods and services which are supplied by firms, and the firms demand resources that are supplied by intermediate firms.
Answer: C
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A) Quantity of money decreases. B) Exchange rate rises. C) Supply of loanable funds decreases. D) Aggregate demand decreases. E) Short-term interest rates rise.
On the vertical axis, the production possibilities frontier shows ________; on the horizontal axis, the production possibilities frontier shows ________
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A) appreciate; increase B) appreciate; decrease C) depreciate; increase D) depreciate; decrease
The argument that rising energy prices caused the decline in U.S. productivity in the 1970s is made less believable due to the
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