In the simple circular flow model:
a. firms are suppliers of resources and demanders of products
b. households are suppliers of products and demanders of resources.
c. households are demanders of products and suppliers of resources.
d. firms are the suppliers of both resources and products.
c
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What does it mean for a good to have a demand-determined price?
What will be an ideal response?
If the President and Congress agree to balance the budget during a recession, then the appropriate monetary policy is
a. no change from the current policy. b. reduce the growth of the money supply. c. constant growth of the money supply. d. increase the growth of the money supply.
The spillover effects of actions that affect the well-being of nonconsenting third parties are called
a. side components. b. externalities. c. free riders. d. internalizations.
When markets fail, public policy can
a. do nothing to improve the situation. b. potentially remedy the problem and increase economic efficiency. c. always remedy the problem and increase economic efficiency. d. in theory, remedy the problem, but in practice, public policy has proven to be ineffective.