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- 1. Multiple ChoiceWhich statement is true about the circular flow diagram?A Households are demanders in the product market and suppliers in the factor marketA Business are demanders in the product market and suppliers in the factor market.A Households are demanders in the factor market and suppliers in the product market.A Businesses and households are not components of the circular flow diagram.
- 2. Multiple Choice
Which arrows on this diagram would represent the transaction between Joe who rents his office to Homework Inc., a company that provides tutoring services?2,34,71,25,6 - 3. Multiple ChoiceArrows 4 and 7 on this circular flow diagram demonstratepricestaxesgoods and services flowmoney flow
- 4. Multiple ChoiceThe arrows 1 to 2 in this diagram represent which aspect of the economy?goods and services flowmoney flowtaxesfactors of production
- 5. Multiple ChoicePlace where buyers and sellers meet to exchange goods and services for moneyMarketFactor of productionMoneyInterdependent
- 6. Multiple ChoiceWhat is being represented by the "red flow line"The flow of moneyThe flow of goods and servicesTaxesProductive resources
- 7. Multiple ChoiceWhat is being represented by the "green flow lines"Flow of MoneyFlow of Goods and ServicesTaxeslaw
- 8. Multiple ChoiceIn the circular flow model, what do individuals sell to the factor marketServicesMoneyProductive Resourcesgoods
- 9. Multiple ChoiceIn the products market,firms buy goods and services from householdsfirms sell goods and services to householdsfirms sell resources to householdsfirms buy resources from households
- 10. Multiple ChoiceThe circular flow model of a market economy showshow profits are madewhat inputs are required for what outputshow many firms can support the needs of how many householdsthe interactions between households and firms in the free market
- 11. Multiple ChoiceIn the circular flow model, the product market describes _____.stores that sell goods and services to householdsthe government paying for public goodshouseholds selling their labor to businesseshouseholds receive income from businesses
- 12. Multiple ChoiceWhat do businesses provide for consumers according to the circular flow model?goods and servicesonly goodsonly servicestaxes
- 13. Multiple ChoiceGoods and services are sold in the ___ marketFactorProduct
- 14. Multiple ChoiceWhich term belongs in the empty box near the bottom of the picture?GovernmentResource markettaxesgoods and services
- 15. Multiple ChoiceSteel Beam Inc. is looking to purchase a new steel-processing machine and factory. In the circular flow diagram, this transaction will take place in theProduct market.Resource marketForeign Exchange marketPublic market
- 16. Multiple ChoiceWhich term belongs in the blank rectangle in the center of the diagram?GovernmentResource markettaxesgoods and services
- 17. Multiple ChoiceT/F: Markets tend to circulate resources, goods, & money through the four sectors of the economy continuously.TrueFalse
- 18. Multiple Choice
Borrow money from a bank to expand business (buy equipment)
Bank
Financial Intermediary
Financial Institution
Mortgage
Investment
- 19. Multiple Choice
Relationship where consumers & producers rely on each other is known as
Leakages
Interdependence
Injections
Circular Flow of Income
- 20. Multiple Choice
The name of the model used to demonstrate interdependence of market participants
circular flow of income
circular flow of markets
interdependence
markets
- 21. Multiple Choice
Government use taxes to produce
Leaders for the government
Weapons for the military
Public Goods and Services
Television Commercials
- 22. Multiple Choice
The circular flow is made up of a continuous interaction of which three groups?
Workers, government and transportation
Homeowners, business owners, car dealers
Factories, farmers, and workers
Households, government, and businesses
- 23. Multiple ChoiceWithin the circular flow, there are two markets. These markets are themarket for firms to sell goods and the market for firms to sell services.goods market and the factor market.market for households to buy goods and the market for households to buy services.market for the government and the market for everyone else.
- 24. Multiple ChoiceIn the circular flow model, which of the following is on the selling side in the product market?governmentonly householdsonly businessesboth businesses and households
- 25. Multiple ChoiceIn the circular flow model, consumption goods are bought and sold in theproduct marketfinancial marketresource marketgovernment market
- 26. Multiple ChoiceIn the circular flow model, which of the following owns the factors of production?governmentonly householdsonly businessesboth businesses and households
- 27. Multiple ChoiceThe circular flow model shows that goods and services flow frombusinesses to households.households to business.the resource market to businesses.the product market to businesses.
- 28. Multiple ChoiceIn the circular flow model, which of the following is on the buying side of the resource markets?governmentonly householdsonly financial institutionsonly businesses
- 29. Multiple ChoiceThe circular flow model shows thedistribution of income and consumption goods across income levels.combinations of the factors of production needed to produce goods and services.flow of expenditure and incomes that arise from the households' and business' decisions.distribution of income to the different factors of production.
- 30. Multiple ChoiceThe circular flow model demonstrates that the decision by households not to purchase as many new cars this year is signaled in theresource market and not the product market.capital market.product market and not the resource market.product market and the resource market.
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