Leakages from the income-expenditure stream are:
A. Consumption, saving, and transfer payments
B. Saving, taxes, and investment
C. Saving, taxes, and imports
D. Imports, taxes, and transfer payments
C. Saving, taxes, and imports
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The selling of a product for a price below its cost of production is called
A) operating at a loss. B) unfair competition. C) fair competition. D) dumping.
The free-market system coordinates output decisions by pushing
A. up price when there is a shortage. B. down price when quantity demanded exceeds quantity supplied. C. up price when there is a surplus. D. up price when quantity supplied exceeds quantity demanded.
In the simplified circular flow diagram, leakage can occur when consumers save some income
a. True b. False Indicate whether the statement is true or false
If we observe that when the price of chocolate increases by 10%, quantity demanded falls by 5%, then the demand for chocolate is price inelastic
a. True b. False Indicate whether the statement is true or false