The circular flow diagram shows
A) how nominal GDP is distinct from real GDP.
B) how the prices of factors are determined.
C) the effects of inflation in a simple economy.
D) the flows between different sectors of the economy.
D
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What are the two distinguishing characteristics of a public good?
a. nonrivalry in consumption and nonexcludability b. indivisibility in production and excludability of nonpaying customers c. provision by government and funding through taxation d. mass production and comparative advantage
Which of these situations produces the largest profits for oligopolists?
a. The firms reach a Nash equilibrium. b. The firms reach the monopoly outcome. c. The firms reach the competitive outcome. d. The firms produce a quantity of output that lies between the competitive outcome and the monopoly outcome.
Suppose Ford, GM, and Dodge make the majority of pick-up trucks sold in the United States If they all sell for approximately the same price, and Ford offers a $2,000 rebate on new truck sales, what can Ford expect to see?
A. an unprecedented increase in truck sales B. an immediate response by GM and Dodge C. a visit from the antitrust authorities of the government D. a revolution from Ford stockholders
If the government adopts a "hands off" approach to cost-push inflation in the economy, then in the short run there is likely to be:
A. A rise in real output B. A fall in unemployment C. An inflationary spiral D. A recession