Which of the following statements is FALSE?
A) Transactions in which households buy final goods and services occur in the factor market.
B) Saving is the difference between consumer income and expenditures.
C) The value of total output is identical to total income.
D) One definition of total income is that it is the annual cost of producing the entire output of final goods and services.
A
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In the labor market, adjustments to changes in supply and demand
A) usually occur instantly. B) usually take time to occur. C) do not apply, since the labor market does not respond to supply and demand forces. D) do not apply, since wages in the labor market always go up.
In a market system, the major coordination tasks are carried out
a. with the approval of central planners. b. as part of the regular appropriation process of Congress. c. irregularly by the major corporations. d. automatically by the market mechanism.
If the marginal propensity to consume is 0.75, and there is no investment accelerator or crowding out, a $15 billion increase in government expenditures would shift the aggregate demand curve right by
a. $60 billion, but the effect would be larger if there were an investment accelerator. b. $60 billion, but the effect would be smaller if there were an investment accelerator. c. $45 billion, but the effect would be larger if there were an investment accelerator. d. $45 billion, but the effect would be smaller if there were an investment accelerator.
If a bank has negative excess reserves, then its ______ are greater than its ______.
Fill in the blank(s) with the appropriate word(s).