The circular flow model illustrates the crucially important idea of macroeconomics, which is that:
A. every expenditure of someone in the economy is exactly equal to the income of another.
B. only two markets exist in every economy—input and output.
C. income is lower when there is more spending on goods and services.
D. the flow of two things in the economy—"stuff" and "money"—travel in the same direction.
A. every expenditure of someone in the economy is exactly equal to the income of another.
You might also like to view...
The growth of the Euromarkets resulted in
a. developing-country governments borrowing from European banks instead of American and Japanesebanks b. higher interest rates in Europe than in the U.S. and Japan c. a general trend toward substituting foreign aid for bank lending d. a general trend toward substituting bank lending for foreign aid e. none of the above
The short-run aggregate supply curve is positively sloped. Which of the following is not one of the explanations given in the text?
a. the misperception effect b. Sticky wage theory c. market effect d. All of the above are explanations of the profit effect.
Which of the following would be studied by macroeconomists?
A. Inflation in developing countries B. The effect of government subsidies on sugar prices C. The effect of rent controls on housing prices in New York City D. The impact of the minimum wage on families below the poverty level
One effect of having access to cheap foreign goods can be to raise workers’ real wages.
Answer the following statement true (T) or false (F)