The circular flow is used to make the point that
A) unemployment only occurs during a recession.
B) production generates income.
C) rising prices never occur during times of unemployment.
D) households purchase factors of production from firms.
B
You might also like to view...
Given the following information about AAA bank:
Bank Deposits $200,000 Loans 100,000 Required Reserves 40,000 Excess Reserves 60,000 What is the reserve ratio? A) 50 percent B) 40 percent C) 20 percent D) 10 percent
The perfectly competitive firm’s short-run shutdown rule is to shut down immediately if
A. TR < TC. B. TR < SRFC. C. TR < SRVC. D. TR < MC > Q.
Which statement is true?
A. A perfectly elastic demand curve has an elasticity of zero. B. Elasticity measures the change in quantity demanded in response to a change in price. C. Elasticity of demand is found by dividing the percentage change in price by the percentage change in quantity. D. None of these statements are true.
The government serves as an actor in the economy when it
A. alters anti-trust laws B. increases defense spending C. reduces the minimum wage D. improves health and safety standards for certain industries