Question: true or false 4) According to the circular flow model, all else constant, an increase in government spending should cause an increase in spending, income,

true or false

4) According to the circular flow model, all else constant, an increase in government spending should cause an increase in spending, income, and production in the economy.

Answer:

5) Monetary policy consists of changes in taxes, which in turn affects the amount of money households can spend on consumption.

Answer:

6) "Demand" refers to the relationship between the price of a good and the quantity consumers are willing and able to buy at each price.

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