Saving is a leakage from the circular flow. Why didn't the classical economists think saving might cause consumption expenditures to fall short of total output?
What will be an ideal response?
Ques. 2Refer to the above figure. A unit tax has been placed on the good. The producer pays what amount of the tax?
A) none of the tax
B) P2 - P0
C) P2 - P1
D) P1 - P0
Ques. 3Which of the following is NOT a characteristic of monopolistic competition?
A) large number of sellers
B) differentiated products
C) advertising
D) barriers to entry
Ques. 4Refer to the above figure. At a price of 2 per gallon, there is
A) a surplus of 20,000 gallons per month.
B) a shortage of 40,000 gallons per month.
C) a shortage of 80,000 gallons per month.
D) a shortage of 60,000 gallons per month.
Ques. 5A trade surplus occurs when
A) the value of imports is greater than the value of exports.
B) government spending is less than total tax revenue.
C) consumption is greater than disposable income.
D) none of the above.
Ques. 6Refer to the above figure. The Law of Increasing Additional Costs applies in
A) Panel A only.
B) Panel B only.
C) Panels A and B.
D) neither Panel A nor B.
Ques. 7Which of the following federal agencies is NOT engaged in economic regulation?
A) the Federal Reserve
B) Federal Aviation Administration
C) Food and Drug Administration
D) Federal Deposit Insurance Corporation
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