In the specific factors model, a 5% increase in the price of food accompanied by a 1% increase in the price of cloth will cause ________ in the welfare of labor, ________ in the welfare of the fixed factor in the production of food, and ________ in
the welfare of the fixed factor in the production of cloth. A) an ambiguous change; an increase; a decrease
B) an ambiguous change; a decrease; an increase
C) an ambiguous change; an ambiguous change; an ambiguous change
D) a decrease; an ambiguous change; an ambiguous change
E) an increase; a decrease; an increase
A
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The circular flow diagram divides the economy into:
a. Winners and losers. b. Real sector and nominal sector. c. Domestic sector and foreign sector. d. Agricultural sector and non-agricultural sector. e. Producer sector and consumer sector.
Answer the following statements true (T) or false (F)
1) The "sticky price" model is the only one used by macroeconomists. 2) (Consider This) The term "economic investment" refers only to money spent purchasing newly created capital goods such as factories, tools, and warehouses. 3) (Consider This) If a farmer purchases 10 acres of farmland from a neighboring farmer, this would be considered an economic investment. 4) (Consider This) If Ford Motor Company purchases factory equipment previously used by General Motors, this would be considered an economic investment.