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1According to a circular flow diagram, which of the following flows FROM government TO households? TaxesProfits, dividends and rentWages, interest and transfer paymentsPurchase of goods and services
CONCEPTCircular Flow Diagram2Which statement below about economics is false?Economics is part of the humanities because it studies human decision-making.Macroeconomics studies the application of economics across an economy.Most questions about economics address the central banking system and financial economics.Microeconomics studies decision-making at the individual level.CONCEPTWhat is Economics?3Select the statement below that is true for BOTH supply AND demand.Considers the economy from the consumer's point of viewConsiders the economy from the producer's point of viewConsiders price and quantity combinations, with everything else held constantUsually depicted as an upward sloping curveCONCEPTSupply and Demand4Which statement below is false regarding the circular flow diagram?A household is an initial holder of resources in an economy.It is a simple model that gives a big picture view of economic activity.It is a common misconception that the circular flow diagram and GDP are related.It depicts interaction between the three main parties in the economy.
CONCEPTCircular Flow Diagram5Which of the following kinds of unemployment is Naomi experiencing if she has a degree in a field that is experiencing a great deal of growth at the moment but is having a difficult time finding work because she just moved to a new city and does not know anyone yet?FrictionalSeasonalCyclicalStructuralCONCEPTUnemployment/Full Employment - Frictional / Structural / Cyclical6Which definition below corresponds to economic indicators?Data that indicates past, present and future activityExchange transactions that occur across nationsThe movement of money in and out of a country or other entityThe movement of the market through periods of expansion and recession, peaks and troughsCONCEPTWhy Study Macroeconomics?7Which statement below is true about aggregate demand?In the long run, it is indicated by a vertical line.It represents the amount the economy can produce at different price levels.
It slopes downward due to wealth efffect.It slopes upward due to the interest rate effect.CONCEPTAggregate Supply and Aggregate Demand8Which of the following is the point in the business cycle that marks the lowest period of growth in GDP for a specific period?ExpansionTroughRecessionPeak CONCEPTBusiness Cycles - Expansionary/Recessionary (NBER)9Which statement below about the exchange rate is FALSE? Exchange rates are subject to the economic volatility of the countries involved.