The Circular Flow Concept of a Closed Economy Helps to Explain

question 123

Multiple Choice

The circular flow concept of a closed economy helps to explain why:

• A) firms are able to earn profits.
• B) GDP, GNI, and GNE are equal.
• C) unemployment is not a problem in a closed economy-only in an open economy.
• D) nominal GDP is always higher than real GDP.

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Definitions:

Intercept

In the context of linear regression, the intercept is the expected value of the dependent variable when all independent variables are equal to zero.

Predicted Income

An estimate of future financial earnings based on factors such as education, occupation, and economic trends.

Multivariate Regression

A statistical technique used to understand the relationship between one dependent variable and two or more independent variables.