The circular flow model illustrates
A. the interdependence of businesses and consumers.
B. the importance of having a central plan for the economy.
C. how natural and other resources are created.
D. how money is created by the banking system.
Answer: A
You might also like to view...
Consumption is likely to fall if ________
A) the number of mortgage defaults in an economy rises B) the revenue earned by firms increase C) the demand for labor rises D) the supply of labor decreases
Deadweight losses are the only potential cost associated with tariffs, which is why they are preferred to quotas
Indicate whether the statement is true or false
Rising inflationary pressure caused the U.S. to tighten its monetary policy at the end of the 1960s
As a result, market interest rates rose above the Regulation Q ceiling and American banks found it impossible to attract time deposits for re-lending. How did the banks get around this problem? A) by setting their own interest rates and then using better business as compensation for government regulations B) by borrowing funds from European branches, which faced no restriction on the interest they could pay on Eurodollar deposits C) by pushing through new legislation that nullified Regulation Q D) by creating subsidiary branches in foreign countries E) by waiting to trade time deposits until Regulation Q no longer applied
Answer the following questions true (T) or false (F)
1. As the number of firms in a market decreases, the supply curve will shift to the left and the equilibrium price will fall. 2. If the population increases and input prices increase, the equilibrium price of a product will definitely increase. 3. If the number of firms producing electric cars increases and consumer preference for electric cars increases, the equilibrium quantity of electric cars will definitely increase.