According to the circular flow model, which statement is true?
a. Households with income from land and capital are wealthier than households with income only from labor.
b. An entrepreneur who earns a wage must have at least two jobs.
c. A household that owns no land or capital can earn only wages and/or profit.
d. All services are produced by entrepreneurs.
e. Some workers are only paid in interest and profit.
C
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The indifference curve between expected return and the standard deviation of return for a risk-averse investor
A) is downward-sloping. B) is upward-sloping. C) is horizontal. D) is vertical. E) can take any shape.
Consider an economy that is in short-run equilibrium with unemployment below the natural rate. According to the passive approach, low unemployment will eventually cause wages to fall, lowering the firms' cost of doing business
Indicate whether the statement is true or false
There are no idle resources, the multiplier is operative, and autonomous spending rises. It follows that
A) Real GDP will not increase. B) Real GDP will rise. C) prices will rise. D) a and c E) a, b, and c
A disadvantage of a market economy is:
a. basic services for all citizens are not provided b. there is great motivation to create new goods and services c. the economy can change direction quickly and drastically d. citizens have the freedom to choose their employers