One of the principles behind the concept of the circular flow is that A) in every economic exchange, the seller receives exactly the same amount that the buyer spends. B) in every economic exchange, the seller receives less than the amount that the buyer spends. C) in exchange involving products, the seller receives less than […]
Which of the following is TRUE about product markets? A) Factors (land, labor, capital, and entrepreneurial ability) flow from firms to households. B) Factors (land, labor, capital, and entrepreneurial ability) flow from households to firms. C) Goods and services flow from firms to households. D) Goods and services flow from households to firms. ANSWER […]
People who have dropped out of the labor force and who are no longer looking for a job because they believe the job market has little to offer them are classified by the Labor Department as A) discouraged workers. B) wage-rate busters. C) unemployed. D) non-participants. ANSWER A
The largest major change in the U.S. labor force participation rate during the last few decades has been A) the increase in the number of illegal immigrants in the United States. B) the decrease in the number of working women. C) the number of prisoners dropping out of the labor force. D) the increase in […]
In the simple circular flow model A) businesses buy labor services from households, but supply other factors of production themselves. B) households spend their entire income on consumer products. C) profits are a type of income that is not received by households. D) households spend the income they receive from labor services but save the […]
According to the circular flow, the dollar value of a nation’s output is equal to A) wages. B) profits. C) net income minus taxes. D) total income. ANSWER D
In the circular flow model, profits are considered to be A) a cost of doing business. B) equal to zero, or else the circular flow would be out of balance. C) a subtraction from the Gross Domestic Product (GDP). D) a form of interest payment. ANSWER A
In the United States, the labor-force participation rate since 1960 has been A) increasing for females. B) unchanged for both males and females. C) declining for females. D) declining for both males and females. ANSWER A
Economists consider profit to be A) a cost of producing goods and services. B) something that should be eliminated by antitrust laws. C) the same as a salary. D) a reward for incurring losses. ANSWER A
If a person is laid off from a job, he is considered by the Bureau of Labor Statistics to be a A) job leaver. B) reentrant. C) job loser. D) new entrant. ANSWER C
