The simple circular flow of income shows that the total income in an economy equals
A) all taxes paid by households.
B) total expenditures.
C) the total amount of money supplied by the government.
D) total profits earned by firms.
B
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In the above figure, the equilibrium real wage rate is
A) $10 per hour. B) $15 per hour. C) $20 per hour. D) none of the above
Very few players are drafted into the NFL when they play at Division II or Division III schools whereas more players are drafted in the MLB from these schools. What can explain this?
A) Attending a Division II or Division III school sends a stronger signal of future and present quality in the NFL. B) Attending a Division II or Division III school sends a weaker signal of future and present quality in the MLB. C) A signal of future and present quality is more important in the MLB than in the NFL. D) Attending a particular school is like a screening test for life insurance.