Which of the following statements about the circular-flow diagram is correct?
a. One must imagine that the economy operates without money in order to make sense of the diagram.
b. The diagram leaves out details that are not essential for understanding the economic transactions that occur between households and firms.
c. The government cannot be excluded as a decision maker in a circular-flow diagram.
d. All of the above are correct.
b
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In Spain, people are considered organ donors unless they explicitly indicate they do not want to be. In the United States, people are only considered organ donors if they explicitly indicate they wish to be. Behavioral economics would suggest that
A) everything else equal, the opt-in system of Spain would generate more organ donors. as a percentage of the adult population. B) everything else equal, the opt-in system of the United States would generate more organ donors as a percentage of the adult population. C) everything else equal, the opt-out system of Spain would generate more organ donors. as a percentage of the adult population. D) everything else equal, the opt-out system of the United States would generate more organ donors as a percentage of the adult population.
Nominal GDP is calculated by using
a. prices set in a base year. b. average prices in all major cities. c. current prices d. prices charged by initial producers.
Suppose there is a shortage in the market for loanable funds. Is the interest rate above or below its equilibrium level? How do desired saving and desired investment at this interest rate compare?
If the dollar-euro exchange rate on June 30, 2010, is $1.225 per euro, then the euro-dollar exchange rate would be:
a. $2.45 per dollar. b. $0.816 per dollar. c. $1.225 per dollar. d. $1 per dollar.