Consumption spending refers to ________ spending on goods and services
A) government B) business C) foreign D) household
D
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Which of the following does not take place in the direct finance market?
A) Ownership in corporations is sold in the form of preferred stock. B) Ownership in corporations is sold in the form of common stock. C) Corporate bonds are sold to savers. D) Deposits from savers are accumulated and loans made to borrowers.
Suppose you are the manager of Big Boards, a firm that produces particle board. To make your particle board, you purchase sawdust from timber farms. During the process of harvesting timber, both lumber and sawdust are produced. If the demand for lumber increases, this will cause the production of sawdust to ________ and the price of sawdust to ________.
A) decrease; fall B) increase; fall C) increase; rise D) decrease; rise
The nation of Aquilonia has decided to end its policy of not trading with the rest of the world. When it ends its trade restrictions, it discovers that it is importing incense, exporting steel, and neither importing nor exporting rugs. We can conclude that Aquilonia's new free-trade policy has
a. increased consumer surplus and producer surplus in the incense market. b. increased consumer surplus in the steel market and left producer surplus in the rug market unchanged. c. decreased consumer surplus in both the steel and rug markets. d. decreased consumer surplus in the steel market and increased total surplus in the incense market.
Answer the following statements true (T) or false (F)
1. If society has over-allocated resources to a particular activity, then the marginal benefits of the activity would be less than the marginal costs. 2. A nation's production possibilities curve shows the maximum combinations of resources that a nation can use. 3. A reduction in the unemployment rate will cause the nation's production possibilities curve to shift outwards. 4. Economic growth is shown as an increase in production from inside the production possibilities curve out toward a point on the possibilities curve.