Which one of the following is a leakage from the circular flow of income?
(a) Exports.
(b) Taxation.
(c) Investment.
(d) Externalities.
Answer: (b) Taxation.
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Prisoners in World War II POW camps traded products for other products, a process referred to as
A) central planning. B) advantage exchange. C) barter. D) rationing.
The big-push theory argues that coordination failures may arise because of
a. pecuniary externalities. b. technological externalities. c. lack of human capital. d. all of the above.
In China, beef is considered a:
A) luxury. B) necessity. C) close substitute for chicken. D) none of the above.
An increase in the expected rate of inflation will ________ the expected return on bonds relative to the that on ________ assets, everything else held constant
A) reduce; financial B) reduce; real C) raise; financial D) raise; real