In a circular-flow diagram, total income and total expenditures in an economy are:
A) equal because firms are ultimately owned by households.
B) equal only if there is no saving.
C) equal because every transaction has a buyer and a seller.
D) always equal because some people's income is not for production.
C
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A corporation is not
a. a legal identity separate from shareholders b. eligible to issue stock as a method of acquiring capital to expand operations c. allowed to file for bankruptcy protection d. a business form allowing owners to earn income e. a business organization whose ownership is the same as management
If the demand for labor decreases and the supply of labor is unchanged, then the opportunity cost of leisure will decrease
a. True b. False Indicate whether the statement is true or false
During this century, the growth rate of real GDP in the United States has averaged approximately
What will be an ideal response?
If aggregate expenditures increase by $12 billion and equilibrium GDP consequently increases by $48 billion, then the marginal propensity to save in the economy must be:
A. 0.75 B. 0.25 C. 0.8 D. 0.2