Exam 5: The Market System and the Private and Public Sector

An import is defined as:

The resources owned by firms that shut down in the process of creative destruction:

In a market economy, _____ own(s)all the basic resources or factors of production.

Which of the following will invariably be illustrated by a circular flow of income diagram?

The market process by which new products and new firms replace existing products and firms is called:

The _____ tend to have a smaller public sector relative to the total economy.

The _____ illustrates the money flows that connect the various sectors in the economy.

Which of the following statements is a defining feature of a corporation?

The circular flow of income model shows that, if households and firms were the only two sectors in the economy, then:

According to the circular flow of income, households interact with business firms by:

Which of the following is true of the U.S.government?

Which of the following is not considered a financial intermediary?

The figure given below represents the circular flow of income between households, firms, financial intermediaries, and foreign countries. Figure 4.2 Refer to Figure 4.2.What is the total savings of the household sector?

The figure given below represents the equilibrium price and output in the market for restaurant meals and delivery meals. Figure 4.1 Refer to Figure 4.1.Identify the impact on the price of Restaurant Meals and Delivery Meals following the direction of the shifts in demand in these two industries.

Which of the following is true of a freely functioning market?

Which of the following is true of households?

In 2009, household spending was the smallest component of total spending in the U.S.economy.