Which of the following statements best characterizes Say’s law?
a. Supply does not automatically create an adequate demand.
b. Wages and prices are inflexible downward.
c. All income generated from output is used to buy goods and services.
d. Full employment cannot be maintained for a long period of time.
c. All income generated from output is used to buy goods and services.
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Personal income less personal taxes is called:
A) personal disposable income. B) national income. C) compensation of employees. D) savings.
During periods of unemployment
A. the production possibilities curve shifts inward. B. the economy operates at a point outside the production possibilities curve. C. the economy operates at a point inside the production possibilities curve. D. the production possibilities curve shifts outward.
Which of the following would be considered a supply-side policy?
A. an increase in government regulations that require businesses to internalize pollution costs B. decreasing taxes to increase the incentive to work C. an increase in government spending that would lead to increased aggregate demand D. increasing the amount of Social Security contributions paid by businesses to help fund the Social Security program
The diamond/water paradox helps to illustrate the concept of marginal value.
Answer the following statement true (T) or false (F)