Which of the following best illustrates the circular flow model in action?
A. Bobbie goes to work and builds cars, and uses the income she receives to buy food at the
grocery store.
B. Evan buys a new couch; the owner of the furniture store uses some of the money from the
sale to pay her supplier, and uses the rest to take her family out to dinner.
C. Boeing experiences a surge in orders for new airplanes, prompting the company to hire
more workers.
D. All of these answers illustrate the workings of the circular flow model.
Answer: D
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Which of the following had the highest rate of growth during the period 1948-72?
A) West Germany B) Vietnam C) Japan D) The United States of America
The total cost (TC) of producing computer software diskettes (Q) is given as: TC = 200 + 5Q. What is the average fixed cost?
A) 500 B) 5Q C) 5 D) 5 + (200/Q) E) none of the above
There are at least three exchange rates between every pair of national currencies
a. True b. False Indicate whether the statement is true or false
The FE curve illustrates all combinations of domestic output levels and interest rates for which
A. the domestic product market is in equilibrium. B. there is full employment. C. the domestic money market is in equilibrium. D. there is a zero balance for the country's official settlements balance.