The circular flow diagram illustrates the flow of resources between households and government
a. True
b. False
Indicate whether the statement is true or false
False
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The slope of an indifference curve at all points reflects
A. the terms by which the consumer can trade off goods in the market. B. the relative prices of the two goods. C. the willingness of the consumer to trade one good for another. D. consumer income relative to the price of a good. E. the relative price ratio of the two goods.
Explain the argument that consumption is the best tax base. Explain the argument that wealth is the best tax base. Explain the argument that income is the best tax base
In your opinion, which measure is the best tax base - consumption, income, or wealth? Why?
When EP /P rises
A) IM will rise. B) IM will fall. C) IM may rise or fall. D) IM is not affected. E) IM and P* will both rise.
If government purchases increase and net taxes decrease, _____
a. the price level will fall b. money supply must rise c. the aggregate demand curve shifts leftward d. aggregate supply shifts rightward e. output and employment will increase