The circular flow model primarily studies how decisions are made by what two groups?
a. consumers and suppliers
b. households and firms
c. government and households
d. government and firms
b. households and firms
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A student was heard to remark, “Even though I am certain to fail this course, I cannot withdraw from it since it is too late to get back my tuition.” Use one or more “Ideas for Beyond the Final Exam” to analyze this reasoning.
What will be an ideal response?
An expansionary monetary policy raises firms' cash flows by ________ interest rates
A) lowering real B) lowering nominal C) raising real D) raising nominal
What is the relationship between price elasticity of demand and the monopolist's revenue?
a. marginal revenue is maximized where demand is unit elastic. b. average revenue is maximized where demand is unit elastic. c. marginal revenue is negative where demand is inelastic. d. average revenue is negative where demand is inelastic. e. marginal revenue is lowest where demand is unit elastic.
Ongoing inflation means the Fed must respond to
a. an upward-shifting AS curve b. a downward-shifting AS curve c. changing interest rate targets d. a depression e. a lower real interest rate