Test Your Knowledge!

If one event follows the other, we can automatically conclude that the other must have caused the one.

According to our text, economic growth is caused by:

The simple circular flow model provides:

A pure capitalist economy is an economy in which:

What does it mean for a country if it is currently producing at a point beyond (to the right of) the production possibilities curve?

Which of the following is an example of a normative economic statement?

When it comes to critical thinking, all of the following are important questions to consider when analyzing economic information, except:

When a country’s government imposes a tariff (import tax) on foreign cars, then it benefits this country’s car manufacturers. Therefore, it benefits its entire economy.
This statement is:

Let’s assume that a country is operating on the production possibilities curve. Without a shift in the curve, in order to get more of one good, what must happen?

Let’s suppose that in year 1 average incomes in the economy equal $30,000. The following year (year 2), average incomes rise to $33,000 (a ten percent increase). Let’s suppose that prices (inflation) from year 1 to year 2 rise by twelve percent. From year 1 to year 2: