Based on the circular flow model, goods and services flow from:
a. households to businesses in product markets.
b. businesses to households in product markets.
c. households to businesses in factor markets.
d. businesses to households in factor markets.
b
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Used cars sell for much less than new cars because
A) of imperfect competition in the automobile industry. B) buyers know much more about the quality of used cars than sellers do. C) sellers know much more about the quality of used cars than buyers do. D) physical depreciation of used cars is very high. E) of licensing arrangements by the government.
Many economists argue that the Fed contributed to the housing bubble by:
A. passing laws that allowed financial institutions to create credit default swaps. B. buying mortgage-backed securities for foreclosed homes. C. keeping the Fed funds rate lower than what the Taylor rule predicts. D. paying interest on bank reserves.
The president of the Micro Brewing Corporation asks you, as the company economist, to forecast changes in consumer beer purchases associated with a proposed price change. You conduct a survey and find that if the price of a six-pack increases from $5.50
to $7.50, the quantity demanded will decrease from 2200 units to 1800 units a month. Should the Micro Brewing Corporation raise its price? Explain the economic basis for this recommendation to the president. Please provide the best answer for the statement.
Refer to the information provided in Table 19.2 below to answer the question that follows.
Table 19.2 
Refer to Table 19.2. The tax rate structure in this example is
A. proportional. B. progressive. C. regressive. D. marginal.