In the circular flow model, which of the following is considered a leakage?
A. Investment spending
B. Business spending
C. Household saving
D. Total exports
Answer: C
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The demand for labor curve is derived from the:
A) total product of labor. B) supply curve for labor. C) average product of labor. D) value of marginal product of labor.
Consider the distributed lag model Yt = ?0 + ?1Xt + ?2Xt-1 + ?3Xt-2 + … + ?r+1Xt-r + ut. The dynamic causal effect is
A) ?0 + ?1 B) ?1 + ?2+…+?r+1 C) ?0 + ?1+…+?r+1 D) ?1
In the aggregate expenditures model, the equilibrium real GDP is
A. assumed to be equal to the full-employment real GDP level. B. always less than the full-employment real GDP level. C. always above the full-employment real GDP level. D. not necessarily equal to the full-employment real GDP.
Refer to the figure shown, which represents the production possibilities frontiers for Countries A and B. Country A has the comparative advantage in:
A. neither cars nor trucks. B. cars and Country B has the comparative advantage in trucks. C. trucks and Country B has the comparative advantage in cars. D. cars and trucks.