Where does profit enter in the circular flow? Why?
What will be an ideal response?
Profit is a payment made to entrepreneurs just as wages are a payment made to labor. Entrepreneurs must be rewarded for providing their services, and profit is the reward. Hence, profit is a cost of production.
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If supply and demand both increase, the new equilibrium price will be ________ and the new equilibrium quantity will be ________.
A. uncertain; higher B. higher; higher C. lower; lower D. lower; uncertain
An increase in bond prices accompanies a decrease in interest rates.
a. true b. false
A decrease in foreign incomes
A) increases aggregate demand in the United States. B) increases the aggregate quantity demanded in the United States. C) decreases the aggregate quantity demanded in the United States. D) decreases aggregate demand in the United States.
If (T ? G) = (X ? IM), then (S ? I)
a. is greater than zero. b. is zero. c. is less than zero. d. cannot be calculated.