In the circular flow model, firms purchase in the
a. money market and sell in the product market
b. product market and sell in the resource market
c. resource market and sell in the money market
d. product market and sell in the product market
e. resource market and sell in the product market
E
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An increase in the aggregate expenditures schedule ________.
A. decreases aggregate demand by the amount of the increase in aggregate expenditures B. increases aggregate demand by the amount of the initial increase in aggregate expenditures times the multiplier C. decreases aggregate demand by the amount of the initial increase in aggregate expenditures times the multiplier D. increases aggregate demand by the amount of the increase in aggregate expenditures only
The current account balance consists of
A) the trade balance plus the services balance. B) net exports of goods and services, minus net unilateral transfers. C) net exports of goods and services, plus net income from abroad, plus net unilateral transfers. D) net exports of goods and services, plus net income from abroad, plus net unilateral transfers, minus the financial account balance.
Which of the following is correct? Gross private domestic investment:
a. Includes goods that are produced but not consumed. b. Includes stock and bonds. c. Excludes spending for new residential housing. d. All of the above are correct.
In terms of the circular flow diagram, households make expenditures in the _____ market and receive income through the _____ market
A. product; financial B. resource; product C. product; resource D. capital; product