Question 1

Capital is best defined as

Accepted Answer

A)  produced goods used by businesses. 
B)  financial capital. 
C)  investment. 
D)  money. 
E)  stocks and/or bonds.

Question 2

Human capital is

Accepted Answer

A)  solely the innate ability we are born with. 
B)  the money humans have saved. 
C)  the knowledge humans accumulate through education and experience. 
D)  machinery that needs human supervision. 
E)  any type of machinery.

Question 3

Which of the following is a consumption good or service?

Accepted Answer

A)  a personal computer purchased in order to play games at home 
B)  a United Airline ticket counter 
C)  the Endeavor space shuttle 
D)  a United Parcel Service truck delivering Christmas gifts 
E)  a satellite dish installed by Cox Cable to download programs that are then distributed through its cable system

Question 4

Jan is attending college and studying to be an investment broker.To improve her chances of employment following college, she has interned at a top brokerage firm during the last two summers.Jan's internship has increased her

Accepted Answer

A)  natural labor. 
B)  human capital. 
C)  consumption services. 
D)  natural resources. 
E)  entrepreneurship capital.

Question 5

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.

Question 6

Terri is enrolled in her first economics course.She is required to give a presentation about the circular flow.Which of the following statements should she include in her presentation?

Accepted Answer

A)  Households choose the amount of the factors of production to provide the firms. 
B)  Firms choose the amount of the factors of production to provide households. 
C)  Households receive wages for the amount of entrepreneurship they provide firms. 
D)  Firms pay wages for the amount of entrepreneurship they provide households. 
E)  The flows of goods and services and payments for the goods and services flow in the same direction.

Question 7

Emerging market economies are located primarily in

Accepted Answer

A)  Western Europe. 
B)  Southeast Asia. 
C)  Eastern Europe. 
D)  South America. 
E)  Northern Africa.

Question 8

________ is the human resource that organizes labor, land, and capital.

Accepted Answer

A)  Human capital 
B)  Human skill 
C)  A gift of nature 
D)  Entrepreneurship 
E)  Profit

Question 9

What are the payments each factor of production receives?

Accepted Answer

The answer of What are the payments each factor of...

Question 10

In the circular flow model, which of the following owns the factors of production?

Accepted Answer

A)  only federal, state, and local governments 
B)  only households 
C)  only firms 
D)  both firms and households 
E)  firms, households, and all levels of government

Question 11

Of the following, the largest source of revenue for the federal government is

Accepted Answer

A)  personal income taxes. 
B)  sales taxes. 
C)  corporate income taxes. 
D)  property taxes. 
E)  lottery revenue.

Question 12

In the circular flow model with the government sector, transfers

Accepted Answer

A)  flow in the same direction as do taxes. 
B)  flow in the opposite direction as do taxes. 
C)  to households flow in the same direction as do expenditures on goods and services. 
D)  to firms flow in the same direction as do rent, wages, interest, and profits. 
E)  flow only through the goods market.

Question 13

Wages are paid to ________ and interest is paid to ________.

Accepted Answer

A)  entrepreneurs; capital 
B)  labor; capital 
C)  labor; land 
D)  entrepreneurs; land 
E)  labor; entrepreneurs

Question 14

Goods and services bought by the government account for around ________ percent of total production.

Accepted Answer

A)  2 
B)  8 
C)  18 
D)  35 
E)  67

Question 15

State and local governments obtain most of their revenue from

Accepted Answer

A)  excise taxes and property taxes. 
B)  state income taxes on individuals and corporate income taxes. 
C)  sales taxes and transfers from the federal government. 
D)  state lotteries and corporate income taxes. 
E)  corporate income taxes and property taxes.

Question 16

In the factor market, firms ________ and households ________.

Accepted Answer

A)  hire land, labor, capital, and entrepreneurship services; purchase goods and services 
B)  supply land, labor, capital, and entrepreneurship services; hire land, labor, capital, and entrepreneurship services 
C)  pay rent, wages, interest, and profit; earn rent, wages, interest, and profit 
D)  purchase goods and services; supply goods and services 
E)  supply goods and services; purchase goods and services

Question 17

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.

Question 18

State and local governments finance expenditures mainly from

Accepted Answer

A)  tax revenue. 
B)  funds provided by the federal government. 
C)  government bonds issued at the state level. 
D)  private bank loans. 
E)  lottery funds.

Question 19

The national debt is the total amount the ________ government has ________ to make expenditures that exceed tax revenue.

Accepted Answer

A)  state and local; borrowed 
B)  federal; taxed U.S.citizens 
C)  state and local; taxed U.S.citizens 
D)  federal; borrowed 
E)  federal; loaned

Question 20

Approximately ________ people live in the United States and ________ people live in the world.

Accepted Answer

A)  400 million; 8 billion 
B)  300 million; 7 billion 
C)  200 million; 5 billion 
D)  300 million; 6 billion 
E)  200 million; 6 billion

Exam 2: The Usand Global Economies