The circular flow diagram is best described as a(n)
A. abstraction of little value in macroeconomics.
B. exact representation of the cause and effect relationship between spending and employment.
C. model that clarifies the relationship between spending and income.
D. model to explain the relationship between the federal deficit and tax revenues.
Answer: C
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As opposed to GDP, GNP tries to measure
A) the happiness of a nation. B) the value of all intermediate goods produced in a nation. C) the economic performance of a nation's citizens regardless of where they happen to be producing. D) the economic performance of a country's economy regardless of the nationality of the producers.
The local banking industry currently has a Herfindahl-Hirschman index (HHI) value of 1575 and two of the competing banks have considered merging. Because the merger would raise the HHI by 215 points, the Federal Trade Commission would likely
A) challenge the merger. B) not challenge the merger. C) allow the merger under the condition that HHI does not rise by more than 215 points as promised. D) allow the merger under the condition that the HHI remain at the premerger level of 1575.
Hasan’s coworker brings in tacos at the same time as Hasan’s manager brings in pizza. The marginal utility of the first taco for Hasan is 6 utils. How many slices of pizza will Hasan eat before he switches to eating tacos?
a. 1
b. 2
c. 3
d. 4
How much revenue will the government raise from the tax?
A. $70
B. $140
C. $210
D. $280