Module 3 Exam
1. Draw the circular flow complete with all leakages and injections. Explain
how the leakages get injected back into the economy.
The leakages, household savings and net tax revenue, get injected back into the economy through
Economics- the study of allocation of our limited resources to satisfy our unlimited wants.
Resources- inputs used to produce goods and services.
Scarcity- exists when human wants(material and nonmaterial) EXCEED available resources.
*time is a precious r
1. Economics is the study of choice under conditions of scarcity. A nation needs to study
economics in order to understand the world better and what the effects of a global events,
such as war or famines, might have on the lives of i
Module 5 Exam Su 16
1. Explain the structure and function of the Federal Reserve
The Federal Reserve System was founded 1913 and uses a three-part structure. The
first part is a central, 7 member authority who are appointed by the president and
Draw and explain the three ranges on the aggregate demand and
In range 1 the aggregate demand increases and moves along the supply curve, the output
increases as a result but the price does not. In this range, the economy is operating in
Module 4 Exam
1. According to the classicals, deviations from full employment are due to adjustments from
shifts in the labor supply and demand curves. These shifts were discussed in chapters 8 and 9.
Why do Keynesians argue this point?