Explain the supply and demand of products, factors of production, and the payments for the products and factors of production as described in the circular flow diagram
What will be an ideal response?
Households supply the factors of production demanded by firms through the factor market. Firms pay income to the households for these factors. Firms supply the goods and services demanded by households through the product market. Firms collect revenue from the households for the goods being purchased.
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One area of labor issues that the labor side agreement to NAFTA does not open to foreign consultation or investigation is
A) the use of child labor. B) worker exposure to unsafe conditions. C) minimum wages. D) worker's rights to organize. E) worker exposure to toxic hazards.
If a firm is earning short-run economic profits shown in the above figure, in the long run
A) firms exit the industry, the market supply curve shifts rightward, and the market price falls. B) firms enter the industry, the market supply curve shifts rightward, and the market price falls. C) firms exit the industry, the market supply curve shifts leftward, and the market price falls. D) firms enter the industry, the market supply curve shifts rightward, and the market price rises.
The amount by which actual output falls short of potential output is called: a. a deadweight loss
b. real GDP. c. a recessionary gap. d. the full-employment output. e. an expansionary gap.
Inflation-targeting is a practice in which the central bank is legally required to focus only on keeping: a. inflation low
b. unemployment low. c. investment rates high. d. interest rates high.