Which of the following statements is NOT true about the relationship between the dollar value of total output and total income? A) The dollar value of total output equals total income because profit is considered a cost of production. B) The dollar value of total output equals total income because of the economic definition of […]
Which of the following is NOT an important factor affecting economic growth? A) the rate of growth of capital B) the rate of saving C) the rate of growth in labor productivity D) the growth of leisure ANSWER D
How much of each dollar spent by a consumer ultimately becomes income to someone else? A) less than one dollar B) It depends on how much the cost there is in the distribution channel that delivers the good from the manufacturer to the consumer. C) It depends on how much labor was needed to produce […]
Which of the following is TRUE? A) Real and nominal values are not related. B) Real standards of living can increase without any positive economic growth. C) Real standards of living decrease with positive economic growth. D) Real growth rates fail to account for by price level changes. ANSWER B
The two sectors of the economy in the simple circular flow model are A) the employed and the unemployed. B) households and businesses. C) foreign markets and domestic markets. D) the private sector and the public sector. ANSWER B
In the simple circular flow model, total income in one nation must equal A) the sum of wages, rents, interest and profits. B) the yearly amount earned by that nation’s resources. C) the total monetary value of all final goods and services. D) All of the above are correct. ANSWER D
Which of the following would most likely be defined as a final good? A) a computer tablet B) wheat C) iron ore D) lumber ANSWER A
In the simple circular flow A) producers trade goods and services for monetary payments in the product market. B) consumers trade resources for goods and services in the factor market. C) businesses trade goods and services for resources in the product market. D) consumers trade goods and services for monetary payments in the factor market. […]
In the product market A) businesses trade goods and services for resources. B) consumers trade monetary payments for goods and services. C) consumers trade goods and services for resources. D) consumers trade resources for goods and services. ANSWER B
The population of a small town is 5,000. There are 4,000 people in the labor force, and 3,000 people are employed. The unemployment rate equals A) 25 percent. B) 60 percent. C) 75 percent. D) an undetermined amount given the lack of information. ANSWER A
