What are the two basic principles of aggregation?
The two principles are:
1 . Although the composition of demand and supply in the various markets may be terribly important for some purposes (such as how income is distributed and the diets people enjoy), it may be of little consequence for the economy-wide issues of growth, inflation, and unemployment?the issues that concern macroeconomists.
2 . During economic fluctuations, markets tend to move up or down together.
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The circular flow model shows the flow of
A) expenditure and income throughout the economy. B) only money throughout the economy. C) only funds in stock and bond markets. D) only tax payments and government expenditures. E) goods markets and factor markets as they move through the economy.
All are examples of government purchases that would be included in GDP except:
A. pencils for the employees of the FBI to use. B. the salaries of those in the military working in California. C. replacement calculators for the Congressional Budget Office. D. salaries paid by government to foreign contractors in Iraq.
If a price floor is not binding, then a. there will be a surplus in the market
b. there will be a shortage in the market. c. there will be no effect on the market price or quantity sold. d. the market will be less efficient than it would be without the price floor.
A Korean steel company produces steel in the United States, with some of its steel being exported to other nations and some of it being sold within the United States. If the prices of this steel increase, then
a. the GDP deflator and the CPI will both increase. b. the GDP deflator will increase and the CPI will be unchanged. c. the GDP deflator will be unchanged and the CPI will increase. d. the GDP deflator and the CPI will both be unchanged.