As the price of a product falls, the demand for the product increases, ceteris paribus
Indicate whether the statement is true or false
FALSE
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What role does money play in the circular flow model?
Inflation
A. has no impact on taxing strategies. B. can be temporarily offset with tax cuts. C. only became a tax problem in the late 1990s. D. generally affects state governments most severely.
A temporary decrease in government purchases in the classical model would
A) shift the production function to the left. B) shift the marginal product of labor curve to the right. C) shift the labor demand curve to the left. D) shift the labor supply curve to the left.
The presence of market failures implies that:
A. money is not an effective tool for exchange in a market system. B. there is an active role for government, even in a market system. C. individuals and firms should strive to be self-sufficient rather than specialize. D. command systems are superior to market systems in the allocation of resources.