Answer the following statements true (T) or false (F)
1. A nation that imports more than it exports has a surplus balance of trade.
2. Whenever planned injections exceed planned leakages, total spending is less than total output.
3. Taxes are a leakage from the circular flow.
4. The GDP is the current market value of final goods and services produced by the nation’s economy over a period of time.
5. Constant-dollar GDP and real GDP are the same thing.
1. FALSE
2. FALSE
3. TRUE
4. TRUE
5. TRUE
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When positive externalities are involved, the market is said to
A. fail, because it underproduces the good connected with the positive externality. B. fail, because it overproduces the good connected with the positive externality. C. succeed, because it produces the socially optimal quantity of the good connected with the positive externality. D. be "in optimum," because the equilibrium fully adjusts for the positive externality.
The use of deductibles and coinsurance are examples of attempts by insurance companies to deal with the problem of
A) moral hazard. B) adverse selection. C) failure of policyholders to keep paying their premiums. D) excessive government regulation.
Government policies resulting intended to increase equality (cutting the pie into more equal slices) include (i) the welfare system (ii) unemployment insurance (iii) progressive income tax
a. (i) only b. (ii) only c. (i) and (ii) only d. (i), (ii), and (iii)
Which of the following statements is true?
A) The marginal revenue of a monopolistically competitive firm will be positive at high prices and negative at low prices. B) Because the demand curve for a monopolistically competitive firm is downward-sloping its marginal revenue will be negative. C) The marginal revenue of a monopolistically competitive firm will be always be positive. D) The marginal revenue of a monopolistically competitive firm will be positive at low prices and negative at high prices.