Refer to the above figure. If box B represents the resource market and flow (3) represents money income, then:
A. box C is the product market and box D is households.
B. box C is the product market and box A is households.
C. box A is the product market and box C is households.
D. box D is the product market and box C is households.
Answer: D
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When constructing an economic model, economists
a. rely mostly on their own value judgments and ignore the far more complex world of facts b. always try to duplicate reality by including all available information c. use assumptions that are true for the individual but never true for the whole economy d. must rely on simplifying assumptions that abstract from the complexity of the real world e. are primarily concerned with making realistic assumptions
Based on the graphs for an increase in aggregate demand and the Phillips curve, we can see that when aggregate demand is strong, ______.
a. RGDP is low
b. unemployment is high
c. inflation is low
d. inflation is high
Which form of returns to specialization means that the units of resources required to produce one unit are assumed to remain the same no matter where a country is on the production possibilities frontier?
What will be an ideal response?
Which measure of inflation best reflects changing prices for the average consumer?
A. Headline inflation B. Nominal inflation C. Core inflation D. Hyper inflation