The circular flow model illustrates the crucially important idea of macroeconomics, which is that:
A. only two markets exist in every economy-input and output.
B. income is lower when there is more spending on goods and services.
C. every expenditure of someone in the economy is exactly equal to the income of another.
D. the flow of two things in the economy-"stuff" and "money"-travel in the same direction.
Answer: C
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Seignorage is also known as an inflation tax since ________
A) money balances lose value in real terms B) inflation can be caused by rising energy costs C) higher interest rates can crowd-out investment spending D) budget deficits entail an increase in the size of the national debt
Becky received a raise at work. She now substitutes Kraft Macaroni and Cheese for generic macaroni and cheese. Kraft Macaroni and Cheese is an example of:
a. Inferior Good b. Market Good c. Normal Good d. Brand Good
Government intervention in agriculture usually involves
A) price ceilings in order to keep food prices low. B) price ceilings in order to subsidize U.S. exports. C) price supports in order to keep farm incomes high. D) price supports in order to keep agricultural imports low.
The price of hard drives used in the manufacturing of laptop computers has risen. This will lead to ________ laptop computers.
A. a decrease in the quantity supplied of B. an increase in the quantity supplied of C. a decrease in the supply of D. an increase in the supply of