In the simple circular flow model, total income in one nation must equal
A. the sum of wages, rents, interest and profits.
B. the yearly amount earned by that nation's resources.
C. the total monetary value of all final goods and services.
D. All of these are correct.
Answer: D
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A public franchise
A) is an unregulated monopoly necessary for the public good. B) is a government designation that a private firm is the only legal producer of a good or service. C) is a corporation that is owned by stockholders. D) results from ownership of a key raw material.
If the required reserve ratio is 10 percent, currency in circulation is $400 billion, checkable deposits are $1000 billion, and excess reserves total $1 billion, then the M1 money multiplier is
A) 2.5. B) 2.8. C) 2.0. D) 0.7.
Assume that foreign capital flows into a nation rise due to expected increases in stock market appreciation. If the nation has highly mobile international capital markets and a fixed exchange rate system, what happens to the GDP Price Index and net nonreserve international borrowing/lending balance in the context of the Three-Sector-Model? a. The GDP Price Index rises and net nonreserve
international borrowing/lending balance becomes more positive (or less negative). b. The GDP Price Index rises and net nonreserve international borrowing/lending balance becomes more negative (or less positive). c. The GDP Price Index falls and net nonreserve international borrowing/lending balance becomes more positive (or less negative). d. The GDP Price Index and net nonreserve international borrowing/lending balance remain the same. e. There is not enough information to determine what happens to these two macroeconomic variables.
Which of the following makes fixed payments indefinitely?
A. Amortized loan B. Coupon bond C. Zero-coupon bond D. Consol