A Market Exists When

question 292

Multiple Choice

A market exists when

• A) an absolute advantage is achieved by one country.
• B) people exchange money for goods and services.
• C) the cost of production is equated to the price by a government agency.
• D) a physical location is created to facilitate the exchange of personal information about consumer choices.

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Definitions:

Aggregate Income

The total amount of income earned by individuals and businesses within an economy.

Consumption Function

An economic equation that illustrates the connection between gross national income and total consumption levels.

Consumption Function

An economic formula representing the relationship between total consumption and gross national income, indicating how much households intend to consume at various income levels.

Aggregate Income

The total income earned by all individuals and organizations in an economy over a specific period of time.