Which of the following is a leakage in the context of the Circular Flow of Income & Expenditure model? A Taxes B) Investment C Consumption D) Exports E Income Question 3 1 Point Suppose the total population is 100 million, of which 50 million are in the labour force

Economics Dec 11, 2020

Which of the following is a leakage in the context of the Circular Flow of Income & Expenditure model? A Taxes B) Investment C Consumption D) Exports E Income
Question 3 1 Point Suppose the total population is 100 million, of which 50 million are in the labour force. There are 40 million people employed full-time and another 8 million employed part-time. There are 3 million university students. The unemployment rate is: (?. 50% B 22% © 16% D 6% E 4%
Question 4 1 Point Which of the following would cause 'demand-pull' inflation: Α. Excessive rises in the price of imported raw materials B Excessive government deficits © Excessive wage rises D Excessive rises in industry borrowing costs E All of the above (A - D)
Question 5 1 Point Which of the following would cause 'demand-pull' inflation: A Rising imported raw material prices B Government taxation exceeding spending Easing of monetary and credit conditions D Consumers saving more out of their disposable income E Less domestic goods being sold to foreigners
Question 6 1 Point Which of the following would represent a rise in aggregate demand? A) A rise in saving B) A fall in investment C) An increase in taxes D A fall in consumption E) A rise in exports
Question 7 1 Point Potential output can best be described as which of the following? Α) The total change in aggregate demand over a year B The sustainable level of output that could be produced in an economy © The under utilisation of resources in an economy D The rate of change of GDP over one year E No answer is correct
Question 8 1 Point Suppose that the CPI in a country increases from 150 to 153 over a period of a year. What is the rate of inflation? A) 3% B) 2% © 1.02% D 0.03% E 0.02%
Question 9 1 Point Frictional unemployment is the result of: Α. A shift in the pattern of consumer demand ?. Workers and employers being ill-informed about the labour market © The introduction of new technology D The economy entering the recessionary phase of the business cycle Employers responding to the time of year E and cutting back on their level of production
Question 10 1 Point Which of the following is not a type of unemployment? ? Frictional B Structural C Seasonal D) Technological E Temporal

Expert Solution

2. Taxes

3. 4%

4.All of the above.

5. A

6.E

7.C

8.A

9.D

10.E

A simple income–expenditure model

Because accounting identities—between gross national product and gross national income, between saving and investment, and so on—express relationships that must hold whatever the level of income, they cannot be used to explain what determines the particular level of income in a given period or what causes the level of income to change from one period to the next. The explanation of what happens must be based on statements about the behaviour of the participants in the economic system; in the present context, this means the behaviour of firms and households.

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