In the circular flow diagram, aggregate expenditure includes the sum of
A) saving and investment.
B) consumption and investment.
C) consumption, investment, and saving.
D) income and saving.
B
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If the market demand in a monopolistically competitive industry increases, a likely result in the long run will be
A) less elastic demand curves facing each firm. B) a higher ratio of price to average cost. C) a larger number of firms producing a similar product. D) a transition from monopolistic competition to oligopoly.
Per capita real GDP is of limited use as a measure of economic well being for all the following reasons, except:
a. it says nothing about the quality of the environment. b. it does not reflect the degree of personal freedom in a society. c. it is not adjusted for changes in leisure time. d. it is not adjusted for changes in the rate of inflation. e. it says nothing about the distribution of income.