Households are vital to the circular flow model in what two ways?
A. They supply factors of production and purchase goods and services.
B. They vote for political officers and pay taxes.
C. They facilitate exchange between consumers and firms.
D. They export goods and services and import goods and services.
Answer: A
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Normally, when a governmental price control affects the price, it can be expected to result in a
A. reduction in the number of units purchased only when the price is forced down. B. reduction in the number of units purchased when the price is forced down and an increase number of units purchased when the price is forced up. C. decrease in the number of units purchased when the price is forced up or down. D. increase in the number of units purchased when the price is forced up or down.
To stay one step ahead of the forces of competition, a firm can adopt one of these strategies except
a. Cost reduction b. Product differentiation c. Advertising d. Reduction in the intensity of competition
Goods produced for consumption in 2003 but remain unsold in 2003 become
a. intended inventories b. unwanted inventories c. aggregate expenditure d. transitory investment e. intended investment
Saving for protection against unexpected setbacks-such as the loss of a job or a medical emergency-is called ________ saving.
A. life-cycle B. precautionary C. bequest D. public