The circular flow model:
a. Illustrates the interdependence of businesses and consumers
b. Assumes that central planning is taking place
c. Illustrates how natural resources are created
d. Illustrates how money is created by the banking system
a. Illustrates the interdependence of businesses and consumers
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Asymmetric information is:
A) information revealed by economic agents turns out to be wrong. B) inflation forecasts are systematically to high or too low. C) some economic agents have more information than others. D) the government knows less about the economy than households and firms.
Total federal government spending in 2007 was
a. less than $100 billion b. between $125 billion and $250 billion c. $750 billion d. over $2.8 trillion e. over $12.5 trillion
Distinguish between the economist's definition of profit and the accountant's definition. Which is superior for decision making?
Suppose the typical basket for the calculation of the CPI includes one computer. Since computers have gotten better over time as a result of technological change, what problem does this create for calculating the CPI?