All of the following are examples of spending on goods and services in the circular flow model except
A) Amanda purchases a new electric guitar to pursue her hobby seriously.
B) Chaitanya buys a new spa pedicure chair for her expanding nail salon business.
C) Hernan buys a pizza at Papa C's.
D) Lenny buys a new digital camera to take pictures at his son's graduation.
Answer: B
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Gasoline taxes are usually used in part to finance the road and highway repair and new construction. Which principle of taxation does this type of tax most fit and why?
What will be an ideal response?
At any point above the current LM curve, there is an
A) excess demand for money. B) excess supply of money. C) excess demand for goods. D) excess supply of goods.
The price of apples falls. What happens in the market for apple pies?
A) The equilibrium price falls, and the equilibrium quantity rises. B) The equilibrium price rises, and the equilibrium quantity falls. C) The equilibrium price and quantity rise. D) The equilibrium price and quantity fall.
In the long run firms will ________ as long as there are more economies of scale and new firms will enter the industry as long as they earn ________.
A. expand; positive economic profits B. expand; zero profits C. contract; positive economic profits D. contract; zero profits