Transfer payments are an injection into the circular flow of income and expenditure model
a. True
b. False
Indicate whether the statement is true or false
True
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In Figure 3-5 above, saving is positive at
A) point J. B) point K. C) point L. D) all of the above.
In Country Z, the government simultaneously increases its expenditures by $25 billion and increases taxes by $25 billion. If the MPS is equal to 0.2, the government's action ________ real GDP by ________
A) increases; $125 billion B) increases; $25 billion C) increases; $100 billion D) has no effect on; $0
On a straight-line production possibilities frontier, which of the following is true?
a. The problem of scarcity does not exist. b. Resources are imperfect substitutes. c. Opportunity costs are constant. d. Technology is rapidly expanding. e. Some resources are not being used efficiently.
When the government imposes a tax, sellers raise their price by the full amount of the tax
a. True b. False Indicate whether the statement is true or false