In the circular flow model, producers
A) and households spend earnings from resource sales on goods and services in the factor market.
B) spend earnings from resource sales on goods and services in the product market.
C) sell goods and services in the input market.
D) hire resources sold by households in the factor market.
D
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Which of the following statements is not true of fixed and flexible exchange rate systems?
a. Under fixed exchange rates, government officials have little direct role in the foreign exchange market. b. Under fixed exchange rates, the government must select an appropriate exchange rate. c. Under fixed exchange rates, active central bank intervention is necessary to maintain the fixed exchange rate. d. Under fixed exchange rates, the governments must stand ready to buy all foreign exchange offered to it and supply all foreign exchange demanded from it. e. Flexible exchange rates rely on market forces to set the exchange rate, but fixed exchange rates are set by central banks.
The Fed does not try to reduce frictional unemployment because it
a. is easier to eliminate with fiscal policy b. is not a serious social problem c. has microeconomic solutions d. signals a strong economy e. rarely exceeds a 1 percent rate
The burden of the public debt
a. cannot create inflation b. may create inflation if it is held by the Fed and financed by taxes c. may create inflation if it is held by foreigners d. may create inflation if it is held by the Fed and financed by the creation of deposits in the Treasury's account at the Fed e. may create inflation if it is held by state and local governments and financed by property or sales taxes
Which of the following would NOT be an example of a technological change?
A. Google develops a new way to perform Internet searches that makes searches produce more relevant results. B. A team of nuclear scientists develop a new way of generating nuclear power that is safer than the older methods but is more expensive to implement. C. The government passes a law expanding the funding available to NASA and other agencies concerned with the advancement of basic science. D. A pharmaceutical company develops a new drug that effectively fights malaria.