Leakages in the circular flow model are
A) caused by people not acting rational.
B) possible when unemployment exists.
C) reflected in the vertical long-run aggregate supply curve.
D) caused by people saving instead of spending.
D
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A current account deficit can occur if ________, all else equal
A) net national savings equals zero B) net factor income from abroad equals zero C) net exports are negative D) net investment income is negative
Goodwill is listed as an asset on a firm's balance sheet
Indicate whether the statement is true or false
Capital goods are typically purchased to ________. They get included in GDP ________
A) replace raw materials; in the year they are produced B) enable the investor to produce other goods and services; in each year they are utilized C) enable the investor to consume less in the current period; as they are used up in the stages of production D) enable the investor to produce other goods and services; in the year they are produced E) none of the above
The import of Apple iPads assembled in Shanghai at a $295 wholesale price ($213 cost and $82 profit margin) adds more than it should to the U.S. trade deficit with China because
a. Chinese assembly labor represents only 47 % of the wholesale cost b. the iPad's popularity has triggered an enormous number of unit sales c. wholesale prices only count in the trade statistics if final product prices are higher d. as with foreign-assembled minivans, most of the subassembly components come from the U.S. e. the Chinese yuan is a managed currency