In the simple circular flow model containing just households and business firms, all income is received by households in exchange for
A) consumer expenditures.
B) wages.
C) labor services.
D) product.
C
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According to John Rawls, the fair distribution of income is the one that
A) makes the poorest person as well off as possible. B) makes the average person as well off as possible. C) results in equal income for all society members. D) is based on fair rules.
Ceteris paribus, for an upward-sloping labor supply curve, there is an increase in the quantity of labor supplied when the:
a) Demand for labor increases. b) Wage rate increases. c) Amount of leisure time increases. d) Tax rate increases.
Refer to Figure 7.1. Which of the following statements is incorrect?
A. Bundle A costs less than bundle E. B. Bundle C costs as much as bundle D. C. Bundle B costs more than bundle C. D. Bundle F costs more than bundle C.
Explain the problems giving rise to this statement: “You would think the government would want to do something to improve economic conditions when the economy is in trouble, but the government is slow to act.”
What will be an ideal response?