Which of the following statements is TRUE about profits?
A. Profits are excluded from the circular flow of the income diagram.
B. The only portion of profits that are included in the circular flow diagram are the portion paid out in the form of dividends.
C. Profits are considered a cost of doing business.
D. Profits are considered one of the resources necessary for production.
Answer: C
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According to the idea of comparable worth, a firm employing secretaries and steelworkers should ideally pay equal wages to both the groups of workers irrespective of the type of job each group does
a. True b. False Indicate whether the statement is true or false
Continuous rapid growth of the money supply relative to the growth of real output will most likely lead to
a. persistent inflation. b. low nominal interest rates. c. high rates of real economic growth. d. low unemployment.
Why are externalities associated with common property rather than private property?
What will be an ideal response?
Assuming that Figure 7.1 is a market for money that can be borrowed or saved, Box 3 is 
A. "r" for interest rate. B. "$*" for the equilibrium amount borrowed/saved. C. "r*" for equilibrium interest rate. D. "$" for the amount borrowed/saved.