In the circular flow model, the factor markets are the markets in which
A) consumption goods and services are bought and sold.
B) government goods and services are provided.
C) land, labor, capital, and entrepreneurship are bought and sold.
D) investment goods and services are bought and sold.
E) governments impose all their taxes.
C
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If domestic and foreign prices rise by the same relative amount, what will happen to the trade balance?
a. It will rise. b. Nothing will happen. c. It will fall. d. Not enough information is provided to answer the question.
If the monthly unemployment rate increase mentioned in the Application was a temporary aberration, the best economic decision by the committee would be to
A) not change monetary policy. B) increase the money supply to stimulate the economy. C) decrease the money supply to stimulate the economy. D) decrease the money supply to slow the economy down.