Exam 5: The Market System and the Private and Public 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.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?

Financial intermediaries are best described as:

A trade deficit involves:

The term net exports refers to:

When the government's spending is less than tax revenue, it implies that:

Empirical evidence suggests that the federal budget has remained more or less in surplus between 1990 and 2002.

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.Suppose households reduce saving to $7, 000.Everything else held constant, consumption spending must now be:

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

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

In a market system, the distribution of income is determined by the ownership of resources.

Which of the following is a valid difference between sole proprietorship and partnership?

The owner of a sole proprietorship has limited liability, while stockholders of corporations have unlimited liability.

Which of the following is a defining feature of a multinational firm?

Annual expenditures by the federal government exhibited an upward trend, rising from $3 billion in 1930 to more than $1 trillion in 2010.

The circular flow of income model shows:

Which among the following industrial countries has the highest per capita income as measured by the World Bank in 2009?

According to the World Development Report published by the World Bank, developing countries greatly outnumber industrial countries.

Empirical evidence on the U.S.economy suggests that household spending and income have an inverse relationship.

Consider the circular flow of income model with households and firms as the two sectors.If business spending (investment)were suddenly decreased due to expectations of a dismal economy in the near future, then because total purchases would suddenly be reduced:

According to the theory of consumer sovereignty, the preferences of the business sector alone determines the equilibrium price and output of a good or service in a market.