Question 1

Which of the following correctly lists the categories of factors of production?

Accepted Answer

A)  machines, buildings, land, and money 
B)  hardware, software, land, and money 
C)  capital, money, and labor 
D)  owners, workers, and consumers 
E)  land, labor, capital, and entrepreneurship

Question 2

Capital, as a factor of production, refers to

Accepted Answer

A)  money, stocks, and bonds. 
B)  the production technology used by firms. 
C)  the physical goods used to produce other goods and services. 
D)  the production factors imported from abroad. 
E)  stocks, and bonds but not money.

Question 3

If a product becomes more popular and consumers want more produced, which of the following best describes what happens to move more factors of production into that industry?

Accepted Answer

A)  An agency of the Federal government directs the movement of factors. 
B)  The chief executive officers or presidents of corporations require that factors leave one industry and move to the other industry. 
C)  Factor owners voluntarily move their factors because they want to satisfy the interests of consumers. 
D)  Wages, rent, interest, and profit increase in that industry, thereby giving factors the incentive to move to that industry. 
E)  Consumers increase their demand for the products and, as a result, the taxes the producers must pay decrease enabling the producers to hire more factors of production.

Question 4

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.

Question 5

As a percentage of total world production, production in the 29 advanced economies is about ________ percent of total world production and in the 118 developing economies is about ________ percent of total world production.

Accepted Answer

A)  56; 36 
B)  23; 62 
C)  59; 12 
D)  30; 46 
E)  19; 73

Question 6

It is conventional to divide the nation's total production into four categories.Name and explain the four categories.In the United States, which category accounts for the largest share and the smallest share of the nation's total production?

Accepted Answer

The answer of It is conventional to divide the nation's...

Question 7

Which of the following is an example of an effort to decrease human capital differences between an advanced and a developing economy?

Accepted Answer

A)  Habitat for Humanity builds houses for low income families in the United States. 
B)  Colorado State University developed efficient and inexpensive cook stoves which are distributed to poor families in Africa and Asia. 
C)  Creating Hope International trains women in Afghanistan to become tailors. 
D)  The Grameen Bank provides small business loans to very poor women in Bangladesh. 
E)  Intel donates money to a fund that provides safe drinking water in Nepal.

Question 8

Households and firms in the U.S.economy interact with those in the rest of the world in the ________ market and in the ________ market.

Accepted Answer

A)  goods; factor 
B)  goods; financial 
C)  government; goods 
D)  financial; factor 
E)  firm; government

Question 9

The largest share of total production in the United States is

Accepted Answer

A)  consumption goods and services. 
B)  capital goods. 
C)  government goods and services. 
D)  exported goods and services. 
E)  imported goods and services.

Question 10

Which factor of production is paid "interest"?

Accepted Answer

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

Question 11

Within the U.S.economy, the role of the government

Accepted Answer

A)  includes providing some goods and services. 
B)  is solely to collect taxes. 
C)  is quite small and barely effects the private sector. 
D)  is solely to regulate and punish those who break the law. 
E)  is, in part, to determine the wages and salaries that all workers are paid.

Question 12

Payments to the factors of production are

Accepted Answer

A)  rent, mortgage, interest, and bonds. 
B)  rent, interest, bonds, and profit or loss. 
C)  rent, wages, interest, and profit or loss. 
D)  rent, wages, profit or loss, and bonus. 
E)  land, labor, capital, and entrepreneurship.

Question 13

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.

Question 14

The majority of the value of production in the world economy is produced in

Accepted Answer

A)  all of the developing economies taken together. 
B)  all of Africa and the Middle East taken together. 
C)  China and other Asian developing economies. 
D)  all of the advanced economies taken together. 
E)  all of the emerging market economies taken together.

Question 15

The functional distribution of income measures which of the following?

Accepted Answer

A)  How federal tax revenues are related to the business function that employs taxpayers. 
B)  The distribution of earnings by the factors of production. 
C)  The proportion of income generated by the four types of expenditures on goods and services. 
D)  The distribution of income among households. 
E)  The distribution of income among nations.

Question 16

Canada is classified by the International Monetary Fund as

Accepted Answer

A)  an advanced economy. 
B)  a developing economy. 
C)  a transition economy. 
D)  an emerging market economy. 
E)  a natural-resource based economy.

Question 17

Explain the structure of the circular flow model.

Accepted Answer

The answer of Explain the structure of the circular flow...

Question 18

Which of the following is NOT considered capital?

Accepted Answer

A)  An assembly line at a General Motors plant. 
B)  A computer used by your instructor for presentations in class. 
C)  Stocks and bonds that are sold by Pepsico. 
D)  The furniture in the President's office. 
E)  A nail gun used for building houses.

Question 19

Households receive transfers from ________ and firms receive transfers from ________.

Accepted Answer

A)  government; government 
B)  firms; households 
C)  government; government and households 
D)  firms and government; government 
E)  government; no one

Question 20

2.5 Chapter Figures
  
The figure above shows the circular flow model.
-In the figure above, which of the following represents a money flow?

Accepted Answer

A)  Goods purchased 
B)  Interest 
C)  Capital 
D)  Services sold 
E)  Goods supplied

Exam 2: The Usand Global Economies