In the circular flow model A) households buy goods and services while firms sell goods and services. Firms obtain labor from households, capital from government, and raw materials from firms. B) households demand goods and services which are supplied by firms, and the firms demand resources that are supplied by intermediate firms. C) households buy […]
Over the last 100 years in the United States, unemployment reached its highest rate A) in the 1920s. B) in the 1930s. C) in the 1980s. D) in the 1970s. ANSWER B
Goods and services are sold A) only as intermediate goods. B) by households. C) in the factor markets. D) in the product markets. ANSWER D
The population is 1,000 million, the labor force is 750 million, and the number of unemployed is 30 million. What is the unemployment rate? A) 4 percent B) 3 percent C) 10 percent D) 7.5 percent ANSWER A
Resources can be purchased A) exclusively through the government. B) in the product markets. C) in the factor markets. D) at a grocery store. ANSWER C
To be officially classified as unemployed, a person must be A) at least 18 and not working. B) laid off or fired. C) collecting unemployment benefits. D) at least 16, not working and actively seeking employment. ANSWER D
Profits represent A) a reward to entrepreneurs. B) the income earned from a bond. C) the difference between total tax revenue and total government spending. D) the payments firms make to their employees. ANSWER A
Total income A) excludes profits. B) includes only wages and interest payments. C) is the yearly amount earned by owners of the nation’s resources. D) includes only wages received by workers. ANSWER C
How do economists view profits? A) The firm’s profit equals the sum of all payments to the 5 factors of production. B) Profits are an asset the business holds. C) Profits are guaranteed as long as a firm operates ethically. D) Profits are one of the costs paid to a factor of production. ANSWER […]
The labor force is defined as A) all individuals who are at least 16 years old and are currently employed. B) all individuals who are currently employed. C) all individuals who are at least 16 years old and are employed, looking for work or not looking for work. D) all individuals who are at least […]
