The simple circular flow model shows that:
A. households are on the buying side of both product and resource markets.
B. businesses are on the selling side of both product and resource markets.
C. households are on the selling side of the resource market and on the buying side of the
product market.
D. businesses are on the buying side of the product market and on the selling side of the
resource market.
Answer: C
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If a bank receives a $5 million discount loan from the Fed, then the bank's reserves will
A) increase by $5 million. B) increase by more than $5 million. C) increase by less than $5 million. D) not change.
Which of the following is not one of the ways in which the United States finances a trade deficit?
A. Selling U.S. products to foreigners B. Selling U.S. land and factories to foreigners C. Selling U.S. stocks and bonds to foreigners D. Selling U.S. assets to foreigners
When former president Obama promised to raise taxes only on those whose income exceeds $250,000, he was suggesting the federal tax system be:
A. more progressive. B. proportional. C. regressive. D. less progressive.
Economists often treat the economy's capital stock as fixed because
A. unless the interest rate changes, the capital stock doesn't change. B. labor is a more important factor of production than capital, so economists ignore capital. C. it takes a long time for new investment and the scrapping of old capital to affect the overall quantity of capital. D. there is very little capital in the economy compared with the amount of labor.