Question 1

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 2

Scenario 4-1
In a given year, country A exported $12 million worth of goods to country B and $6 million worth of goods to country C; country B exported $4 million worth of goods to country A and $7 million worth of goods to country C; and country C exported $5 million worth of goods to country A and $2 million worth of goods to country B.
-If a corporation cannot pay its debts, creditors cannot seek payment from shareholders' personal wealth.

Accepted Answer

A) True 
 B)False

Question 3

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

Accepted Answer

A) The owners of a corporation face unlimited liability on debts. 
B) A corporation owns and operates units only in foreign countries. 
C) A corporation is created by a verbal agreement. 
D) A corporation that is based on a verbal agreement is also recognized by State law. 
E) A corporation has a legal identity that is separate from that of its owners. 
A) The owners of a corporation face unlimited liability on debts. 
B) A corporation owns and operates units only in foreign countries. 
C) A corporation is created by a verbal agreement. 
D) A corporation that is based on a verbal agreement is also recognized by State law. 
E) A corporation has a legal identity that is separate from that of its owners.

Question 4

Scenario 4-1
In a given year, country A exported $12 million worth of goods to country B and $6 million worth of goods to country C; country B exported $4 million worth of goods to country A and $7 million worth of goods to country C; and country C exported $5 million worth of goods to country A and $2 million worth of goods to country B.
-An enterprise that has only one shareholder does not constitute a corporation.

Accepted Answer

A) True 
 B)False

Question 5

Scenario 4-1
In a given year, country A exported $12 million worth of goods to country B and $6 million worth of goods to country C; country B exported $4 million worth of goods to country A and $7 million worth of goods to country C; and country C exported $5 million worth of goods to country A and $2 million worth of goods to country B.
-A financial intermediary accepts deposits from savers and makes loans to borrowers.

Accepted Answer

A) True 
 B)False

Question 6

Scenario 4-1
In a given year, country A exported $12 million worth of goods to country B and $6 million worth of goods to country C; country B exported $4 million worth of goods to country A and $7 million worth of goods to country C; and country C exported $5 million worth of goods to country A and $2 million worth of goods to country B.
-The public sector of the U.S. economy includes:

Accepted Answer

A) the federal, state, and local government. 
B) multinational corporations and the federal government. 
C) the Federal Reserve bank of the U.S. 
D) the judiciary and the federal government. 
E) households. 
A) the federal, state, and local government. 
B) multinational corporations and the federal government. 
C) the Federal Reserve bank of the U.S. 
D) the judiciary and the federal government. 
E) households.

Question 7

Scenario 4-1
In a given year, country A exported $12 million worth of goods to country B and $6 million worth of goods to country C; country B exported $4 million worth of goods to country A and $7 million worth of goods to country C; and country C exported $5 million worth of goods to country A and $2 million worth of goods to country B.
-Households and firms pay taxes to the government to:

Accepted Answer

A) increase their consumption spending. 
B) finance the country's import bill. 
C) increase their savings. 
D) improve their standard of living. 
E) finance government expenditures. 
A) increase their consumption spending. 
B) finance the country's import bill. 
C) increase their savings. 
D) improve their standard of living. 
E) finance government expenditures.

Question 8

Scenario 4-1
In a given year, country A exported $12 million worth of goods to country B and $6 million worth of goods to country C; country B exported $4 million worth of goods to country A and $7 million worth of goods to country C; and country C exported $5 million worth of goods to country A and $2 million worth of goods to country B.
-Annual expenditures by the federal government exhibited an upward trend, rising from $3 billion in 1930 to more than $1 trillion in 2010.

Accepted Answer

A) True 
 B)False

Question 9

Scenario 4-1
In a given year, country A exported $12 million worth of goods to country B and $6 million worth of goods to country C; country B exported $4 million worth of goods to country A and $7 million worth of goods to country C; and country C exported $5 million worth of goods to country A and $2 million worth of goods to country B.
-The United States is the largest consumer and importer of grains and other agricultural output in the world.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following institutions form the private sector in an economy?

Accepted Answer

A) Only households 
B) Households and the government 
C) Households, businesses, and foreign firms 
D) Households and businesses only 
E) Foreign investors and foreign governments 
A) Only households 
B) Households and the government 
C) Households, businesses, and foreign firms 
D) Households and businesses only 
E) Foreign investors and foreign governments

Question 11

Which of the following sectors in the economy accounted for about 70% of the spending in the U.S. during 2009?

Accepted Answer

A) The government 
B) Firms 
C) The foreign sector 
D) Investors 
E) Households 
A) The government 
B) Firms 
C) The foreign sector 
D) Investors 
E) Households

Question 12

Scenario 4-1
In a given year, country A exported $12 million worth of goods to country B and $6 million worth of goods to country C; country B exported $4 million worth of goods to country A and $7 million worth of goods to country C; and country C exported $5 million worth of goods to country A and $2 million worth of goods to country B.
-When the government's spending is less than tax revenue, it implies that:

Accepted Answer

A) the government budget is balanced. 
B) the government is running a deficit. 
C) there is a budget surplus. 
D) there is a higher chance of default by the government. 
E) the government needs to borrow from the central bank. 
A) the government budget is balanced. 
B) the government is running a deficit. 
C) there is a budget surplus. 
D) there is a higher chance of default by the government. 
E) the government needs to borrow from the central bank.

Question 13

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 developing 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 developing 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 14

Scenario 4-1
In a given year, country A exported $12 million worth of goods to country B and $6 million worth of goods to country C; country B exported $4 million worth of goods to country A and $7 million worth of goods to country C; and country C exported $5 million worth of goods to country A and $2 million worth of goods to country B.
-Spending on goods and services by all levels of government in the U.S. combined is smaller than investment spending but larger than consumption.

Accepted Answer

A) True 
 B)False

Question 15

Scenario 4-1
In a given year, country A exported $12 million worth of goods to country B and $6 million worth of goods to country C; country B exported $4 million worth of goods to country A and $7 million worth of goods to country C; and country C exported $5 million worth of goods to country A and $2 million worth of goods to country B.
-Which of the following flows from the government to the households?

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 16

The term net exports refers to:

Accepted Answer

A) the situation in which a country's exports exceed its imports. 
B) the situation in which a country's imports exceed its exports. 
C) the shortages that result when a country imposes a price ceiling. 
D) the shortages that result when a country imposes a price floor. 
E) the difference between the value of exports and the value of imports. 
A) the situation in which a country's exports exceed its imports. 
B) the situation in which a country's imports exceed its exports. 
C) the shortages that result when a country imposes a price ceiling. 
D) the shortages that result when a country imposes a price floor. 
E) the difference between the value of exports and the value of imports.

Question 17

Scenario 4-1
In a given year, country A exported $12 million worth of goods to country B and $6 million worth of goods to country C; country B exported $4 million worth of goods to country A and $7 million worth of goods to country C; and country C exported $5 million worth of goods to country A and $2 million worth of goods to country B.
-In 2009, household spending was the smallest component of total spending in the U.S. economy.

Accepted Answer

A) True 
 B)False

Question 18

Scenario 4-1
In a given year, country A exported $12 million worth of goods to country B and $6 million worth of goods to country C; country B exported $4 million worth of goods to country A and $7 million worth of goods to country C; and country C exported $5 million worth of goods to country A and $2 million worth of goods to country B.
-When the flow of money from the foreign countries to the domestic firms equals the flow of money from the home country to the foreign firms, _____.

Accepted Answer

A) a trade surplus exists 
B) an equal amount of agricultural and manufactured products are exported 
C) a trade deficit exists 
D) an equal amount of goods and services are imported 
E) the value of net exports is zero 
A) a trade surplus exists 
B) an equal amount of agricultural and manufactured products are exported 
C) a trade deficit exists 
D) an equal amount of goods and services are imported 
E) the value of net exports is zero

Question 19

Scenario 4-1
In a given year, country A exported $12 million worth of goods to country B and $6 million worth of goods to country C; country B exported $4 million worth of goods to country A and $7 million worth of goods to country C; and country C exported $5 million worth of goods to country A and $2 million worth of goods to country B.
-The owner of a sole proprietorship has limited liability, while stockholders of corporations have unlimited liability.

Accepted Answer

A) True 
 B)False

Question 20

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) A steam turbine electric generator 
E) A packet of breakfast cereal 
A) A pair of jeans 
B) A bottle of Beck's beer 
C) A haircut 
D) A steam turbine electric generator 
E) A packet of breakfast cereal

Which of the following is true of households?

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

Which of the following institutions form the private sector in an economy?

Which of the following sectors in the economy accounted for about 70% of the spending in the U.S. during 2009?

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

The term net exports refers to:

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

The Wealth of Nations: Ownership and Economic Freedom

Scarcity and Opportunity Costs

Markets and the Price System

Using Economics to Understand the World Around You

Elasticity: Demand and Supply

Demand: Consumer Choice

Supply: the Costs of Doing Business

Profit Maximization

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Markets and Government

Antitrust and Regulation

Resource Markets

The Labor Market

The Capital Market

The Land Market and Natural Resources

Current Issues: Income, Income Distribution, Poverty, and Government Policy

World Trade Equilibrium

International Trade Restrictions

Exchange Rates and Financial Links Between Countries

Filters

Exam 4: The Aggregate Economy

Which of the following is true of households?

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

Which of the following institutions form the private sector in an economy?

Which of the following sectors in the economy accounted for about 70% of the spending in the U.S. during 2009?

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

The term net exports refers to:

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

The Wealth of Nations: Ownership and Economic Freedom

Scarcity and Opportunity Costs

Markets and the Price System

Using Economics to Understand the World Around You

Elasticity: Demand and Supply

Demand: Consumer Choice

Supply: the Costs of Doing Business

Profit Maximization

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Markets and Government

Antitrust and Regulation

Resource Markets

The Labor Market

The Capital Market

The Land Market and Natural Resources

Current Issues: Income, Income Distribution, Poverty, and Government Policy

World Trade Equilibrium

International Trade Restrictions

Exchange Rates and Financial Links Between Countries

Filters