Exam 1: The Art and Science of Economic Analysis

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Exhibit 1.2 Exhibit 1.2    -Refer to the circular-flow model in Exhibit 1.2.Firms supply ________ to households through product markets. -Refer to the circular-flow model in Exhibit 1.2.Firms supply ________ to households through product markets.

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Economic ____ usually involves some adjustment to the existing situation.

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A rational individual gives more to charity when such contributions receive favorable tax treatment.

(True/False)
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