In the simple circular flow model containing just households and business firms, the entire product flows to ________ in exchange for ________
A) business firms, labor services
B) business firms, wages
C) households, consumer expenditures
D) households, labor services
C
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Which of the following best describes a command economy?
A) An economy that is characterized by barter trade of goods and services B) An economy where strong controls are imposed by the ruling authority C) An economy in which resources are allocated through the price mechanism. D) An economy in which there are a few privately owned firms
"Crowding out" refers to federal government deficits financed by:
A. borrowing which increases interest rates and thereby reduces private spending. B. increasing taxes which reduces private spending. C. the federal government buying foreign debt which reduces the amount of government spending and government programs. D. reducing government spending which reduces interest rates.