In the circular-flow diagram, payments for labor, land, and capital flow from firms to households through the markets for the factors of production
a. True
b. False
Indicate whether the statement is true or false
True
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When firms in monopolistic competition are making an economic profit, firms will
A) enter the industry, and demand will increase for the original firms. B) exit the industry, and demand will increase for the firms that remain. C) exit the industry, and demand will decrease for the firms that remain. D) enter the industry, and demand will decrease for the original firms.
Assume an economy is in equilibrium at a real GDP of $5 trillion. If aggregate expenditure (AE) increases by $1 trillion, the economy's equilibrium real GDP is likely to _____
a. increase by $1 trillion b. increase by more than $1 trillion c. increase by less than $1 trillion d. decrease by $1 trillion e. decrease by more than $1 trillion
An increase in the price of gasoline will cause a(n)
a. an increase in the quantity of gasoline demanded b. decrease in the quantity of gasoline demanded c. no change in the quantity of gasoline demanded d. increase in the demand for gasoline e. decrease in the demand for gasoline
One of the reasons we know that international labor mobility has been higher at other times is because
A) the percent of our population that was foreign born was higher. B) wages were lower. C) labor was important in agriculture. D) the population was younger.