Economists make assumptions d. to make the world easier to understand. The two loops in the circular-flow diagram represent b. the flow of goods and services and the flow of dollars. A production possibility curve illustrates d. all of the above 7. In the production possibilities frontier shown, the movement from point C to point E was most likely caused by c. unemployment of resources. Economics deals primarily with the concept of b. scarcity.
Prices rise when the government prints too much money.
Suppose you like to make homemade banana cream pies made with vanilla pudding. Assuming all other things are constant, you notice that the price of bananas is higher. It would decrease. If the number of buyers in the market decreases, c. the market demand will decrease. A dress manufacturer is expecting higher prices for dresses in the near future.