Households are vital to the circular flow model in what two ways?
A. They supply factors of production and purchase goods and services.
B. They export goods and services and import goods and services.
C. They vote for political officers and pay taxes.
D. They facilitate exchange between consumers and firms.
A. They supply factors of production and purchase goods and services.
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Explain what is meant by allocative efficiency
What will be an ideal response?
Change in "total factor productivity" may be explained by
A) the relative rates of growth of crime and pollution control measures. B) changes in the quality and composition of the labor force. C) changes in the scale of production. D) All of the above.
During most of the time in recent decades, the government sector
A) has not spent more than it collected in taxes. B) has run large deficits. C) has run large surpluses. D) has balanced its budget every year.
The money multiplier yielded by the deposit-creation formula assumes that
A. banks hold no excess reserves. B. banks hold excess reserves. C. recipients of loans take some of the proceeds in cash. D. recipients of loans do not redeposit their funds in other banks.