The circular flow of income shows
A. the dollar value of output is exactly equal to the total income.
B. the dollar value of output is more or less than the total income, depending on whether profits are positive or negative.
C. the dollar value of output is less than the total income.
D. the dollar value of output is more than the total income because of the existence of profits.
Answer: A
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If the government conducts a survey asking it citizens how much they value having potholes filled in, we can expect
a. an accurate evaluation of the work. b. citizens to understate the value of the work. c. citizens to exaggerate the value of the work. d. most citizens to refuse to answer.
Refer to the above table. The table gives the combinations of real disposable income and real consumption for a college student for a year. What is the value of the average propensity to save equal when real disposable income equals $14,000?
A) 1.1 B) 0.91 C) 0.09 D) 0.7
A ________ occurs when government spending exceeds tax revenue
A) budget deficit B) negative externality C) consumer surplus D) positive externality
There are two can companies, American and National, which have entered into a collusive agreement. The payoff matrix of economic profits is above. If both firms cheat on the collusive agreement, what amount of economic profit is made by American?
A) $0 B) $3,000 C) $4,000 D) -$2,000