A model that shows how dollars flow through markets among households and firms is called the
a. production possibilities frontier.
b. circular-flow diagram.
c. demand and supply diagram.
d. comparative advantage model.
b
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When there is an expansionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; expand B. increase; raise; decline C. decline; lower; decline D. decline; raise; decline
Which of the following statements provides the most accurate description of the period between the Civil War and WWI?
a. Real per capita wages were relatively flat. b. The share of immigrants was increasingly Protestant. c. Businesses became increasingly regulated. d. The average hours of work for employees in the industrial sector increased slightly.
In order to bring a market to its efficient outcome when a negative externality is present, the government could:
A. limit total consumption to the efficient quantity. B. tax the parties involved in the market the value of the external cost. C. limit the price to the efficient level. D. Any of these would bring the market to its efficient level.
If a process is said to be integrated of order one, or I(1), _____.
A. it is stationary at level B. averages of such processes already satisfy the standard limit theorems C. the first difference of the process is weakly dependent D. it does not have a unit root