Leakages in the circular flow model are
A. caused by people saving instead of spending.
B. reflected in the vertical long-run aggregate supply curve.
C. possible when unemployment exists.
D. caused by people not acting rational.
Answer: A
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A) rightward shift of; leftward shift of B) leftward shift of; movement along C) movement along; rightward shift of D) movement along; leftward shift of
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A government can increase long-run economic growth by
a. discouraging saving. b. encouraging education and training of labor. c. increasing the taxation of capital. d. imposing restrictions on international trade. e. all of the above
If the price is reduced from $100 to $80 in Figure 20.1, ceteris paribus,
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