In the circular flow model, the value of total income for an economy ________ the value of total production
A) equals
B) is greater than
C) is less than
D) may be greater than or less than
Answer: A
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If there is no Ricardo-Barro effect, a government budget deficit increases
A) private savings and lowers the real interest rate. B) private savings and raises the real interest rate. C) the demand for loanable funds and raises the real interest rate. D) investment demand and lowers the real interest rate. E) the supply of loanable funds and raises the real interest rate.
A deadweight loss of consumer and/or producer surplus occurs when
a. producers fail to maximize profits. b. mutually beneficial transactions cannot be completed. c. consumers do not maximize their utility. d. the price of inputs increases.
If a central bank increases the money supply in response to an adverse supply shock, then which of the following quantities moves closer to its pre-shock value as a result?
a. both the price level and output b. the price level but not output c. output but not the price level d. neither output nor the price level
Which of the following statements regarding the relative increase in supply of high-skill labor in the United States since 1960 as measured by education level is not true?
A. The supply of highly skilled women to the workforce has increased dramatically since 1960. B. The percent of workers with a college degree has increased dramatically since 1960. C. The percent of workers with an advanced degree has increased dramatically since 1960. D. The percent of workers without a high school degree has fallen dramatically since 1960. E. All of the above statements are true.