The basic lesson that the circular flow models reveals is

basic lesson

basic lesson, The basic lesson that the circular flow models reveals is: a. Monetary and physical flows of goods and services are not connected. b. Someone’s spending is someone else’s income. c. Government intervention into the economy leads to inefficency. d. Firms own and sell the factors of production. 2.If consumers purchase fewer of those products that increase most in price and more of those products that decrease in price as compared to the CPI basket (in other words, consumers substitute away from goods that have increased in price the fastest), then a. changes in the CPI understate the true rate of inflation. b. changes in the CPI are unrelated to the true rate of inflation. c. changes in the CPI accurately reflect the true rate of inflation. d. changes in the CPI overstate the true rate of inflation 3.When Keynes first entered the workforce in 2000 his annual salary was $41,500. Since that time Keynes has completed his studies in Macro1(Embarrassed) and been promoted this year. Now he wants to compare his income progression in real terms with his current salary of $115,000 (in year 2016). If CPI was 136 in 2000 and 156 in 2016, what is then the 2016 equivalent value of his starting 2000 salary? a. $36,179 b. $47,602 c. $53,125 d. No point of doing this question since Macro1 taught him nothing!

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