The circular flow diagram is
a. an accurate description of reality
b. an economic model
c. not expected to explain reality
d. a road map explaining all money flows in the economy
e. a road map explaining all product flows in the economy
B
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A macroeconomist would be interested in the
a. general rise of prices b. decline of cheese prices c. fluctuation of oil prices d. sharp rise of coffee prices
Which of the following statements is true regarding expansionary fiscal policy?
A) It leads to an increase in the supply of bonds by the Treasury. B) It leads to a fall in interest rates. C) It leads to an increase in net exports. D) It tends to reduce to size of government.
Which is not characteristic of a product with relatively inelastic demand?
A. The good is regarded by consumers as a necessity. B. Buyers spend a small percentage of their total income on the product. C. Consumers have had only a short time period to adjust to changes in price. D. There are a large number of good substitutes for the good.
Monopolistic competition and oligopoly are alike because firms in both market structures have some market power.
a. true b. false