Refer to the diagram, in which solid arrows reflect real flows; broken arrows are monetary flows. Flow (3) might represent:
A. government salaries paid to school teachers.
B. property tax payments.
C. a state university's purchase of computers.
D. social security payments to retirees.
A. government salaries paid to school teachers.
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Efficiency in a market occurs when the production of the good is such that
A) marginal benefit exceeds marginal cost. B) marginal benefit equals marginal cost. C) marginal benefit is lower than marginal cost. D) the marginal cost stops increasing. E) marginal benefit exceeds marginal cost by the maximum amount possible.
Which of the following statements is false?
A) Imports and exports account for over one-half of the GDP of the Netherlands. B) China is the leading exporting country, accounting for 10.3 percent of total world exports. C) Because the cost of labor used on farms is so high, the United States exports very little of its wheat, rice, and corn crops. D) Japan is less dependent on foreign trade than is the United States.
Irving Fisher's view that velocity is fairly constant in the short run transforms the equation of exchange into the
A) Friedman's theory of income determination. B) quantity theory of money. C) Keynesian theory of income determination. D) monetary theory of income determination.
Rapid economic growth is important because it
a. makes some people richer b. eliminates scarcity c. makes the unemployment rate zero d. allows the average person to consume more goods and services e. reduces interest rates