In the circular flow diagram, households sell _________ to business firms.
a. information
b. products
c. services
d. labor
d. labor
In the circular flow diagram, households sell labor to business firms.
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A bank seeks a 4% real return on its loans and predicts a 4% annual rate of inflation. It should therefore charge a nominal interest rate of
A) 0%. B) 1%. C) 4%. D) 8%. E) 12%.
Assume that the Cambridge k = 0.25. If the transactions demand for money is equal to $20,000, then income is equal to
A) $20,000. B) $80,000. C) $10,000. D) $5,000.
In the context of collective decision-making, external costs are _____
a. the costs imposed on everyone in the group b. the costs imposed on those outside the group c. the costs imposed on those who voted for the decision d. the costs imposed on those harmed by the decision
Suppose that the market for labor is initially in equilibrium. A decrease in the price of output will cause the equilibrium wage
a. and the equilibrium quantity of labor to rise. b. and the equilibrium quantity of labor to fall. c. to rise and the equilibrium quantity of labor to fall. d. to fall and the equilibrium quantity of labor to rise.