Question 1

The income transferred by the government from a citizen who is earning income to another citizen is referred to as:

Accepted Answer

A) fiscal spending. 
B) transfer payment. 
C) budgetary allowance. 
D) taxation. 
E) internal debt. 
A) fiscal spending. 
B) transfer payment. 
C) budgetary allowance. 
D) taxation. 
E) internal debt.

Question 2

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.In which direction will the resources flow following a shift in the demand for Restaurant Meals and Delivery Meals as represented by the figure?

Accepted Answer

A) Resources flow from where they are more highly valued to where they are less highly valued in order to make the consumer better off. 
B) Resources flow from where they are more highly valued to where they are less highly valued in order to reduce prices. 
C) Resources flow from where they are more highly valued to where they are less valued in order to reduce costs. 
D) Resources flow from Restaurant production and sales to Delivery production and sales. 
E) Resources flow to Restaurant production and sales and away from Delivery production and sales. 
A) Resources flow from where they are more highly valued to where they are less highly valued in order to make the consumer better off. 
B) Resources flow from where they are more highly valued to where they are less highly valued in order to reduce prices. 
C) Resources flow from where they are more highly valued to where they are less valued in order to reduce costs. 
D) Resources flow from Restaurant production and sales to Delivery production and sales. 
E) Resources flow to Restaurant production and sales and away from Delivery production and sales.

Question 3

The wireless communication business has changed dramatically since the 1980s,going from mobile phones to smartphones.This was only possible because:

Accepted Answer

A) of the persuasive advertising campaigns undertaken by firms in the wireless communication industry. 
B) consumers welcomed the changes and were willing and able to pay for them. 
C) of the dot-com stock market bubble that lasted from 1995 to 2000. 
D) the government tightly regulated the wireless communication industry with regulations and taxes. 
E) businesses needed to produce these products in order to recoup their investment in research and development. 
A) of the persuasive advertising campaigns undertaken by firms in the wireless communication industry. 
B) consumers welcomed the changes and were willing and able to pay for them. 
C) of the dot-com stock market bubble that lasted from 1995 to 2000. 
D) the government tightly regulated the wireless communication industry with regulations and taxes. 
E) businesses needed to produce these products in order to recoup their investment in research and development.

Question 4

Which of the following flows from the government to the households,according to the circular flow diagram?

Accepted Answer

A) Goods and services 
B) Resources of production 
C) Taxes 
D) Government services 
E) Loans 
A) Goods and services 
B) Resources of production 
C) Taxes 
D) Government services 
E) Loans

Question 5

An import is defined as:

Accepted Answer

A) a purchase of goods or services from another country. 
B) a business transaction between two or more domestic firms. 
C) a sale of goods or services to another nation. 
D) a tariff on foreign merchandise. 
E) a trade agreement between two industrial countries. 
A) a purchase of goods or services from another country. 
B) a business transaction between two or more domestic firms. 
C) a sale of goods or services to another nation. 
D) a tariff on foreign merchandise. 
E) a trade agreement between two industrial countries.

Question 6

Which of the following is true of households?

Accepted Answer

A) It consists of the employed members of the family. 
B) It can comprise of either related members or unrelated individuals. 
C) It refers to only the owners of rented apartments. 
D) It comprises of a family of at least four members. 
E) It generally describes a family that has two earning members. 
A) It consists of the employed members of the family. 
B) It can comprise of either related members or unrelated individuals. 
C) It refers to only the owners of rented apartments. 
D) It comprises of a family of at least four members. 
E) It generally describes a family that has two earning members.

Question 7

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

Accepted Answer

A) The government in the United States takes the form of a single-party state where opposition parties are not legally allowed to take power. 
B) The size of the federal government in the U.S.has been declining since 1930. 
C) Employment in the government sector currently exceeds employment in the manufacturing sector. 
D) The U.S.federal government plays a much smaller role than state and local government due to states' rights. 
E) The service sector of the U.S.economy employs more number of people than the U.S.government. 
A) The government in the United States takes the form of a single-party state where opposition parties are not legally allowed to take power. 
B) The size of the federal government in the U.S.has been declining since 1930. 
C) Employment in the government sector currently exceeds employment in the manufacturing sector. 
D) The U.S.federal government plays a much smaller role than state and local government due to states' rights. 
E) The service sector of the U.S.economy employs more number of people than the U.S.government.

Question 8

An unmarried couple holding joint title to their condominium constitutes a household.

Accepted Answer

A) True 
 B)False

Question 9

Identify the correct reason behind the rise in agricultural produce in the U.S.despite a drastic decline in the percentage of the country's workforce employed in this sector.

Accepted Answer

A) Use of improved technology 
B) Reduced production costs due to government subsidies 
C) Foreign investment in the agricultural sector 
D) Fall in the demand for agricultural produce 
E) Increased imports of agricultural goods 
A) Use of improved technology 
B) Reduced production costs due to government subsidies 
C) Foreign investment in the agricultural sector 
D) Fall in the demand for agricultural produce 
E) Increased imports of agricultural goods

Question 10

A financial intermediary accepts deposits from savers and makes loans to borrowers.

Accepted Answer

A) True 
 B)False

Question 11

Based on the fact that the companies Ford,IBM,PepsiCo,and McDonald's own and operate units in many different countries,they are categorized as:

Accepted Answer

A) joint ventures. 
B) sole proprietorship firms. 
C) partnership firms. 
D) multinational firms. 
E) co-operative firms. 
A) joint ventures. 
B) sole proprietorship firms. 
C) partnership firms. 
D) multinational firms. 
E) co-operative firms.

Question 12

Mark's ability to purchase goods and services depends on:

Accepted Answer

A) his aesthetic sense. 
B) his ability to hunt out the best bargains. 
C) the amount of information that he has. 
D) his money income. 
E) his intelligence level. 
A) his aesthetic sense. 
B) his ability to hunt out the best bargains. 
C) the amount of information that he has. 
D) his money income. 
E) his intelligence level.

Question 13

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

Accepted Answer

A) buying resource services from business firms. 
B) paying wages for the use of labor. 
C) selling goods and services to firms. 
D) receiving payments from firms for use of resource services. 
E) paying rent to firms for the use of land. 
A) buying resource services from business firms. 
B) paying wages for the use of labor. 
C) selling goods and services to firms. 
D) receiving payments from firms for use of resource services. 
E) paying rent to firms for the use of land.

Question 14

According to the World Bank,the high-income oil-exporting nations like Libya,Saudi Arabia,Kuwait,and the United Arab Emirates:

Accepted Answer

A) are considered to be developing countries. 
B) are the major trade partners of the U.S. 
C) are also considered as industrial market economies. 
D) have highly interdependent economies. 
E) are considered highly developed countries. 
A) are considered to be developing countries. 
B) are the major trade partners of the U.S. 
C) are also considered as industrial market economies. 
D) have highly interdependent economies. 
E) are considered highly developed countries.

Question 15

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

Accepted Answer

A) income received by households is equal to the value of output produced by firms. 
B) households directly lend a part of their savings to firms. 
C) firms own the resources of production and rent it out to households. 
D) resources used in production flow from households to firms. 
E) payments for goods and services flow from firms to households. 
A) income received by households is equal to the value of output produced by firms. 
B) households directly lend a part of their savings to firms. 
C) firms own the resources of production and rent it out to households. 
D) resources used in production flow from households to firms. 
E) payments for goods and services flow from firms to households.

Question 16

A trade deficit occurs when:

Accepted Answer

A) a country imposes a price floor. 
B) a country's imports exceed its exports. 
C) a country imposes a price ceiling. 
D) a country's exports exceed its imports. 
E) when the domestic product market is in disequilibrium. 
A) a country imposes a price floor. 
B) a country's imports exceed its exports. 
C) a country imposes a price ceiling. 
D) a country's exports exceed its imports. 
E) when the domestic product market is in disequilibrium.

Question 17

Which of the following is true of Western Europe,Japan,Canada,Mexico,and China taken together?

Accepted Answer

A) All these countries are classified as high-income countries by the World Bank. 
B) They are all members of the North American Free Trade Agreement [NAFTA]. 
C) All these countries are considered developed countries by the World Bank. 
D) They are collectively the largest trade partners of the U.S. 
E) They are the five largest exporters of agricultural produce in the world. 
A) All these countries are classified as high-income countries by the World Bank. 
B) They are all members of the North American Free Trade Agreement [NAFTA]. 
C) All these countries are considered developed countries by the World Bank. 
D) They are collectively the largest trade partners of the U.S. 
E) They are the five largest exporters of agricultural produce in the world.

Question 18

According to the World Bank,low-income economies are heavily concentrated in:

Accepted Answer

A) Europe and Africa. 
B) Europe and Asia. 
C) Asia and Africa. 
D) Asia and Australia. 
E) North America and Australia. 
A) Europe and Africa. 
B) Europe and Asia. 
C) Asia and Africa. 
D) Asia and Australia. 
E) North America and Australia.

Question 19

Which of the following does not constitute a household consumption item?

Accepted Answer

A) A pair of jeans 
B) A bottle of Beck's beer 
C) A haircut 
D) An electronic scanning machine 
E) A packet of breakfast cereals 
A) A pair of jeans 
B) A bottle of Beck's beer 
C) A haircut 
D) An electronic scanning machine 
E) A packet of breakfast cereals

Question 20

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.The demand for Restaurant Meals shift in one direction while the demand for Delivery Meals shift in another direction.Which of the following impacts will it have on the quantity of Restaurant Meals and Delivery meals purchased by consumers?

Accepted Answer

A) The quantity of Restaurant Meals purchased declines while the quantity of Delivery Meals purchased rises. 
B) The quantity of Restaurant Meals purchased rises while the quantity of Delivery Meals purchased declines. 
C) Both the quantity of Restaurant Meals purchased and the quantity of Delivery Meals purchased declines. 
D) Both the quantity of Restaurant Meals purchased and the quantity of Delivery Meals purchased increases. 
E) The quantity of Restaurant Meals purchased and the quantity of Delivery Meals purchased add up to 100. 
A) The quantity of Restaurant Meals purchased declines while the quantity of Delivery Meals purchased rises. 
B) The quantity of Restaurant Meals purchased rises while the quantity of Delivery Meals purchased declines. 
C) Both the quantity of Restaurant Meals purchased and the quantity of Delivery Meals purchased declines. 
D) Both the quantity of Restaurant Meals purchased and the quantity of Delivery Meals purchased increases. 
E) The quantity of Restaurant Meals purchased and the quantity of Delivery Meals purchased add up to 100.

Exam 4: The Market System and the Private and Public Sector

The income transferred by the government from a citizen who is earning income to another citizen is referred to as:

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.In which direction will the resources flow following a shift in the demand for Restaurant Meals and Delivery Meals as represented by the figure?

The wireless communication business has changed dramatically since the 1980s,going from mobile phones to smartphones.This was only possible because:

Which of the following flows from the government to the households,according to the circular flow diagram?

An import is defined as:

Which of the following is true of households?

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

An unmarried couple holding joint title to their condominium constitutes a household.

Identify the correct reason behind the rise in agricultural produce in the U.S.despite a drastic decline in the percentage of the country's workforce employed in this sector.

A financial intermediary accepts deposits from savers and makes loans to borrowers.

Based on the fact that the companies Ford,IBM,PepsiCo,and McDonald's own and operate units in many different countries,they are categorized as:

Mark's ability to purchase goods and services depends on:

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

According to the World Bank,the high-income oil-exporting nations like Libya,Saudi Arabia,Kuwait,and the United Arab Emirates:

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

A trade deficit occurs when:

Which of the following is true of Western Europe,Japan,Canada,Mexico,and China taken together?

According to the World Bank,low-income economies are heavily concentrated in:

Which of the following does not constitute a household consumption item?

Economics: The World Around You

Choice, opportunity Costs, and Specialization

Markets, Demand and Supply, and the Price System

Elasticity: Demand and Supply

Consumer Choice

Supply: The Costs of Doing Business

Profit Maximization

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Antitrust and Regulation

Market Failures, Government Failures, and Rent Seeking

Resource Markets

The Labor Market

Capital Markets

The Land Market and Natural Resources

Aging, Social Security and Health Care

Income Distribution,Poverty and Government Policy

World Trade Equilibrium

International Trade Restrictions

Exchange Rates and Financial Links Between Countries

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