Refer to Figure 2-14. Unemployment could cause this economy to produce at point B.
Indicate whether the statement is true or false.
Ans: a. True.
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Suppose that a technological advancement substantially reduces the cost of laser eye surgery. This would cause the equilibrium
A) quantity of laser eye surgery to decrease. B) quantity of laser eye surgery to increase. C) price of technology to increase. D) quantity of technology to decrease.
Suppose we are modeling a "closed" economy. The only way its government can obtain more goods and services than it can claim with net tax revenues is for
A) exports to exceed imports. B) imports to exceed exports. C) investment to exceed saving. D) saving to exceed investment.
The price of a good is above the equilibrium price,
a. there is a surplus and the price will rise. b. there is a surplus and the price will fall. c. there is a shortage and the price will rise d. there is a shortage and the price will fall. e. the quantity demanded is equal to the quantity supplied and the price remains unchanged.
In the circular flow model, which of the following is considered a leakage?
A. Investment spending B. Business spending C. Household saving D. Total exports