Question 1

A circular flow model shows the interrelationship between the ________ market and the ________ markets.

Accepted Answer

A)  household; goods 
B)  household; factor 
C)  business; household 
D)  expenditure; income 
E)  goods; factor 
A)  household; goods 
B)  household; factor 
C)  business; household 
D)  expenditure; income 
E)  goods; factor

Question 2

Which of the following is a function of the U.S.federal government?

Accepted Answer

A)  providing the legal and social framework for economic activity 
B)  distributing private goods and services 
C)  deciding for whom firms should produce goods and services 
D)  deciding how much to produce of private goods and services 
E)  determining what wages firms will pay their workers 
A)  providing the legal and social framework for economic activity 
B)  distributing private goods and services 
C)  deciding for whom firms should produce goods and services 
D)  deciding how much to produce of private goods and services 
E)  determining what wages firms will pay their workers

Question 3

What determines the income flows that households receive?

Accepted Answer

A)  an agency of the Federal government 
B)  what they choose to produce, how much is sold, and the price received when sold 
C)  their ownership of factors of production, how much they sell in the factor markets, and the prices received when sold 
D)  financial institutions such as banks 
E)  what they choose to consume 
A)  an agency of the Federal government 
B)  what they choose to produce, how much is sold, and the price received when sold 
C)  their ownership of factors of production, how much they sell in the factor markets, and the prices received when sold 
D)  financial institutions such as banks 
E)  what they choose to consume

Question 4

Which factor of production is paid "profit"?

Accepted Answer

A)  land 
B)  labor 
C)  capital 
D)  entrepreneurship 
E)  human capital 
A)  land 
B)  labor 
C)  capital 
D)  entrepreneurship 
E)  human capital

Question 5

Dan missed class the day the professor covered the circular flow model.Dan asked his friend Joan to explain markets to him.Joan correctly stated that a market

Accepted Answer

A)  requires a physical location for buyers and sellers to get together. 
B)  is any arrangement that brings buyers and sellers together. 
C)  must include a written contract between buyers and sellers. 
D)  is only a place to purchase groceries. 
E)  must have many buyers and only one seller, who is willing to sell to all the buyers. 
A)  requires a physical location for buyers and sellers to get together. 
B)  is any arrangement that brings buyers and sellers together. 
C)  must include a written contract between buyers and sellers. 
D)  is only a place to purchase groceries. 
E)  must have many buyers and only one seller, who is willing to sell to all the buyers.

Question 6

In the circular flow model,which of the following is on the buying side in the goods market?
i.firms
ii.households
iii.federal,state,and local governments

Accepted Answer

A)  i only 
B)  ii only 
C)  iii only 
D)  i and ii 
E)  ii and iii 
A)  i only 
B)  ii only 
C)  iii only 
D)  i and ii 
E)  ii and iii

Question 7

Explain how the largest sources of state tax revenues differs from the largest sources of federal tax revenues.

Accepted Answer

The two largest sources of federal tax r

Question 8

What is the difference between the functional and the personal distribution of income?

Accepted Answer

The functional distribution of

Question 9

An example of a money flow in the circular flow diagram is

Accepted Answer

A)  a student's payment of tuition to her university. 
B)  the government's operation of the court system. 
C)  the government's financing of the national debt. 
D)  a firm's production of goods to sell to a foreign country. 
E)  a farmer's use of land to grow wheat. 
A)  a student's payment of tuition to her university. 
B)  the government's operation of the court system. 
C)  the government's financing of the national debt. 
D)  a firm's production of goods to sell to a foreign country. 
E)  a farmer's use of land to grow wheat.

Question 10

The figure above shows the circular flow model.
-In the figure above,which of the following represents a real flow of a factor of production?

Accepted Answer

A)  Labor 
B)  Wages 
C)  Goods bought 
D)  Services sold 
E)  Firms' expenditures on factors of production 
A)  Labor 
B)  Wages 
C)  Goods bought 
D)  Services sold 
E)  Firms' expenditures on factors of production

Question 11

In the United States,the poorest 20 percent of households receive about ________ percent of total income.

Accepted Answer

A)  3 
B)  15 
C)  23 
D)  49 
E)  20 
A)  3 
B)  15 
C)  23 
D)  49 
E)  20

Question 12

The figure above shows governments in the circular flow.
-In the figure above,firms

Accepted Answer

A)  pay taxes directly to governments. 
B)  sell goods and services to governments in goods markets. 
C)  receive transfers from governments through factor markets. 
D)  own factors of production. 
E)  do all of the above. 
A)  pay taxes directly to governments. 
B)  sell goods and services to governments in goods markets. 
C)  receive transfers from governments through factor markets. 
D)  own factors of production. 
E)  do all of the above.

Question 13

The circular flow model shows the flow of

Accepted Answer

A)  expenditure and income throughout the economy. 
B)  only money throughout the economy. 
C)  only funds in stock and bond markets. 
D)  only tax payments and government expenditures. 
E)  goods market and factor markets as they move through the economy. 
A)  expenditure and income throughout the economy. 
B)  only money throughout the economy. 
C)  only funds in stock and bond markets. 
D)  only tax payments and government expenditures. 
E)  goods market and factor markets as they move through the economy.

Question 14

________ earned the highest amount of income among the factors of production in the United States.

Accepted Answer

A)  Labor 
B)  Capital 
C)  Land 
D)  Entrepreneurship 
E)  Investment 
A)  Labor 
B)  Capital 
C)  Land 
D)  Entrepreneurship 
E)  Investment

Question 15

Compare and contrast the world population with that of the United States.Is the United States becoming a larger or a smaller part of the world's population?

Accepted Answer

The U.S.population was approximately 311

Question 16

The income earned by entrepreneurs is

Accepted Answer

A)  interest. 
B)  wages. 
C)  profit or loss. 
D)  rent, wages, and interest. 
E)  a mixture of rent, wages, interest, and profit. 
A)  interest. 
B)  wages. 
C)  profit or loss. 
D)  rent, wages, and interest. 
E)  a mixture of rent, wages, interest, and profit.

Question 17

U.S.exports of goods and services flow to households and firms in ________ and U.S.financial inflows of capital flow to households and firms in ________.

Accepted Answer

A)  the United States; the United States 
B)  the United States; the rest of the world 
C)  the rest of the world; the United States 
D)  the rest of the world; the rest of the world 
E)  the United States; the rest of the world and the United States 
A)  the United States; the United States 
B)  the United States; the rest of the world 
C)  the rest of the world; the United States 
D)  the rest of the world; the rest of the world 
E)  the United States; the rest of the world and the United States

Question 18

Human capital ________ as you work.As a result,the ___________ of goods and services ________.

Accepted Answer

A)  increases; quantity; increases. 
B)  declines; quality; increases. 
C)  improves; quality; does not change. 
D)  does not change; quality; does not change. 
E)  decreases; quantity; decreases. 
A)  increases; quantity; increases. 
B)  declines; quality; increases. 
C)  improves; quality; does not change. 
D)  does not change; quality; does not change. 
E)  decreases; quantity; decreases.

Question 19

The charitable organization Creating Hope International trains women in Afghanistan to become tailors.This effort reduces

Accepted Answer

A)  physical capital differences between advanced and developing economies. 
B)  entrepreneurship differences between advanced and developing economies. 
C)  agricultural differences between advanced and developing economies. 
D)  manufacturing differences between advanced and developing economies. 
E)  human capital differences between advanced and developing economies. 
A)  physical capital differences between advanced and developing economies. 
B)  entrepreneurship differences between advanced and developing economies. 
C)  agricultural differences between advanced and developing economies. 
D)  manufacturing differences between advanced and developing economies. 
E)  human capital differences between advanced and developing economies.

Question 20

The circular flow model shows the

Accepted Answer

A)  distribution of income and consumption goods across income levels. 
B)  combinations of the factors of production needed to produce goods and services. 
C)  flow of expenditure and incomes that arise from the households', firms', and governments' decisions. 
D)  flow of natural resources from firms to the private market to government and back to firms. 
E)  distribution of income to the different factors of production. 
A)  distribution of income and consumption goods across income levels. 
B)  combinations of the factors of production needed to produce goods and services. 
C)  flow of expenditure and incomes that arise from the households', firms', and governments' decisions. 
D)  flow of natural resources from firms to the private market to government and back to firms. 
E)  distribution of income to the different factors of production.

A circular flow model shows the interrelationship between the market and the markets.

Which of the following is a function of the U.S.federal government?

What determines the income flows that households receive?

Which factor of production is paid "profit"?

Dan missed class the day the professor covered the circular flow model.Dan asked his friend Joan to explain markets to him.Joan correctly stated that a market

In the circular flow model,which of the following is on the buying side in the goods market? i.firms ii.households iii.federal,state,and local governments

Explain how the largest sources of state tax revenues differs from the largest sources of federal tax revenues.

What is the difference between the functional and the personal distribution of income?

An example of a money flow in the circular flow diagram is

The figure above shows the circular flow model. -In the figure above,which of the following represents a real flow of a factor of production?

In the United States,the poorest 20 percent of households receive about ________ percent of total income.

The figure above shows governments in the circular flow. -In the figure above,firms

The circular flow model shows the flow of

________ earned the highest amount of income among the factors of production in the United States.

Compare and contrast the world population with that of the United States.Is the United States becoming a larger or a smaller part of the world's population?

The income earned by entrepreneurs is

U.S.exports of goods and services flow to households and firms in and U.S.financial inflows of capital flow to households and firms in .

Human capital __ as you work.As a result,the _ of goods and services ____.

The charitable organization Creating Hope International trains women in Afghanistan to become tailors.This effort reduces

The circular flow model shows the

Getting Started

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Global Markets in Action

Externalities

Public Goods and Common Resources

Markets With Private Information

Consumer Choice and Demand

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Markets for Factors of Production

Economic Inequality

Filters

Exam 2: The Usand Global Economies

A circular flow model shows the interrelationship between the ________ market and the ________ markets.

Which of the following is a function of the U.S.federal government?

What determines the income flows that households receive?

Which factor of production is paid "profit"?

Dan missed class the day the professor covered the circular flow model.Dan asked his friend Joan to explain markets to him.Joan correctly stated that a market

In the circular flow model,which of the following is on the buying side in the goods market? i.firms ii.households iii.federal,state,and local governments

Explain how the largest sources of state tax revenues differs from the largest sources of federal tax revenues.

What is the difference between the functional and the personal distribution of income?

An example of a money flow in the circular flow diagram is

The figure above shows the circular flow model. -In the figure above,which of the following represents a real flow of a factor of production?

In the United States,the poorest 20 percent of households receive about ________ percent of total income.

The figure above shows governments in the circular flow. -In the figure above,firms

The circular flow model shows the flow of

________ earned the highest amount of income among the factors of production in the United States.

Compare and contrast the world population with that of the United States.Is the United States becoming a larger or a smaller part of the world's population?

The income earned by entrepreneurs is

U.S.exports of goods and services flow to households and firms in ________ and U.S.financial inflows of capital flow to households and firms in ________.

Human capital ________ as you work.As a result,the ___________ of goods and services ________.

The charitable organization Creating Hope International trains women in Afghanistan to become tailors.This effort reduces

The circular flow model shows the

Getting Started

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Global Markets in Action

Externalities

Public Goods and Common Resources

Markets With Private Information

Consumer Choice and Demand

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Markets for Factors of Production

Economic Inequality

Filters

A circular flow model shows the interrelationship between the market and the markets.

U.S.exports of goods and services flow to households and firms in and U.S.financial inflows of capital flow to households and firms in .

Human capital __ as you work.As a result,the _ of goods and services ____.