According to the circular flow model, product markets are where:
A. Households earn their money incomes
B. Businesses incur their consumption expenditures to households
C. Businesses acquire their inputs from households
D. Businesses earn their revenues from households
Answer: D
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After eating four slices of pizza, you are offered a fifth slice for free. You turn down the fifth slice. Your refusal indicates that the
A. marginal utility for four pizza slices is negative. B. marginal utility is positive for the fourth slice and negative for the fifth slice. C. marginal utility for the fourth slice is the largest among all slices. D. total utility for five pizza slices is negative.
When the Fed buys government bonds, bank reserves fall.
a. true b. false
Under the existing system of partially-flexible exchange rates, a country experiencing what it believes is a long-term balance of payments deficit might be expected to:
A. let its currency lose value. B. buy its own currency in the foreign exchange market. C. sell its own currency in the foreign exchange market. D. let its currency gain value.
Producer surplus is
A. the difference between willingness to sell and full costs of productions for the firm. B. the difference between current market price and full costs of production for the firm. C. current market price. D. the difference between the maximum a person is willing to pay and current market price.