Government transfer payments include all of the following except
a. retirement benefits
b. paid vacations
c. veteran benefits
d. disability payments
e. subsidies to farmers
B
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In the circular flow model, households
A) spend earnings from resource sales on goods and services in the product market. B) and firms spend earnings from resource sales on goods and services in the factor market. C) sell goods and services in the input market. D) hire resources sold by firms in the factor market.
Refer to the accompanying figure. Suppose the solid line shows the current demand for coffee. In response to news that next year's coffee harvest will be extremely good due to favorable weather conditions, you should expect:
A. the demand curve to shift to D(B) in anticipation of lower future prices. B. the quantity of coffee demanded to decrease, but no shift in the demand curve. C. the demand curve to shift to D(A) in anticipation of lower future prices. D. neither a change in quantity demanded nor a shift in demand because it will be a long time before next year's coffee crop is harvested.
Figure 11-1
The Red Cross is virtually the only operator of blood banks in the United States. In Figure 11-1 are the demand and cost curves facing the Red Cross blood bank. If the Red Cross were to set price and quantity at the level that it would obtain in the long run in a competitive industry, how much blood would it sell?
a.
OA
b.
OB
c.
OD
d.
OC
The money demand curve will shift to the left if:
A. the nominal interest rate decreases. B. the price level increases. C. ATM machines are introduced. D. the nominal interest rate increases.