10 min

1. In economic models, is inventory investment planned? A) Never B) Not in the short term, but it is in the long term. C) It can be either planned or unplanned. D) Always 2. Which of the following can we conclude about an economy in which the government budget is in balance, exports equal imports, and saving equals planned investment? A) The economy is in equilibrium. B) Interest rates should be reduced. C) Unplanned inventory depletion is occurring. D) Unplanned inventory accumulation is occurring. 3. Saving is and taxes are in the circular flow diagram. A) a leakage; a leakage B) a leakage; an injection C) an injection; an injection D) an injection; a leakage 4. Production is carried out by and generates income for according to the simplest circular flow diagram in the textbook. A) firms; firms B) households; households C) firms; households