Within the circular flow model, which of the following is not represented as a flow of funds into firms?
A) Foreign purchases of goods and services.
B) Income payments.
C) Consumption spending.
D) Government purchases.
B
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Based on the figure below. Starting from long-run equilibrium at point C, a decrease in government spending that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at__ creating _____gap.
A. B; no output B. D; an expansionary C. B; recessionary D. D; a recessionary
In the history of the U.S. economy, which economic era saw both high unemployment and high inflation at the same time?
a. After the Great Depression to the early 1970s b. Since the early 1980s c. The colonial period d. Before and during the Great Depression e. From the early 1970s to the early 1980s
A tax on beer will
A. lower the equilibrium price and raise the equilibrium quantity. B. lower the equilibrium price and lower the equilibrium quantity. C. raise the equilibrium price and raise the equilibrium quantity. D. raise the equilibrium price and lower the equilibrium quantity.
Related to the Economics in Practice on page 36: The results of the survey conducted by Esther Duflo and Abhijit Banerjee found that in extremely poor societies
A. all consumption decisions are made by the government. B. household choice plays no role in consumption decisions. C. the only consumption decisions in which household choice plays a role is in the consumption of biological needs such as food. D. household choice even plays a role in non-food-related consumption decisions.