Which of the following statements is false? In the circular flow model:
A) the funds needed to finance investment spending come from the saving of households.
B) GDP can be measured either by the income received or by the expenditures made.
C) factor payments are made to business firms.
D) consumption expenditures are made by households.
C
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Between 1950 and 1980 in the U.S., interest rates trended upward. During this same time period
A) the rate of money growth declined. B) the rate of money growth increased. C) the government budget deficit (expressed as a percentage of GNP) trended downward. D) the aggregate price level declined quite dramatically.
Which of the following is an example of an injection into the circular flow of income and expenditure?
a. Net taxes b. Saving c. Transfer payments d. Government borrowing e. Disposable income
Bubba is a shrimp fisherman who used $2,000 from his personal savings account to buy a boat and equipment for his shrimp business. The savings account paid 2% interest. What is Bubba's annual opportunity cost of the financial capital that he invested in his business?
a. $20 b. $40 c. $200 d. $400
The term ______ refers to the additional utility provided by one additional unit of consumption.
A. added utility B. Giffen utility C. marginal utility D. utility