The circular flow model demonstrates
A) the role of the government in overseeing the market system.
B) the roles played by households and firms in the market system.
C) how demand and supply for goods and services are brought into equilibrium.
D) how shortages and surpluses are eliminated in a market.
B
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The economic way of thinking asserts, as a universal claim, that
A) politicians are immoral. B) voters are immoral. C) morals don't matter in politics. D) all of the above are true. E) none of the above are true.
If the final expressions in a present value equation used to calculate the price of a bond you are considering buying are "[$75 / (1 + .04)6] + [$2,500 / (1 + .04)6]", which of the following is correct?
A) The face value is $75, the interest rate you need is 1.04 percent, and the coupon will mature in 6 years. B) The face value is $2,500, the coupon is $75, and the coupon will mature in 4 years. C) The face value is $2,500, the interest rate you need is 6 percent, and the coupon will mature in 4 years. D) The coupon is $75, the interest rate you need is 4 percent, and the coupon will mature in 6 years.
Suppose the production of VCRs can be represented by the following production function: q = L0.4 K0.4. The firm currently produces units. If all inputs doubled, the new level of output will equal
A) 20.4 q1. B) 20.8 q1. C) 0.8 q1. D) 1.6 q1.
The most common form of business organization, as far as the number of such firms in business, is the
A) proprietorship. B) partnership. C) corporation. D) S corporation.