CHP 2 Eco

Of the following, the federal government obtains most revenue from

Social Sec taxes

Which markets are depicted in the basic circular flow model?

The goods market and the factor market

In the circular flow model, which of the following is on the selling side in the goods market?

Only firms

What would be an example of capital good?

Antonio, the manager of the local Taco Hut, purchases a new deep fryer

In the circular flow model, which of the following is on the buying side in the goods market? i. firms ii. households iii. federal, state, and local governments

II and III

What would be an example of a consumption good

Jake buys an iPhone

The largest component of federal government spending is for

Medicare and Medicaid

Items bought by businesses to help produce other goods and services are called

capital goods.

Items that are purchased by individuals for their own enjoyment are called

consumption goods and services

The largest share of total production in the United States is

consumption goods and services

The circular flow model shows the

flow of expenditure and incomes that arise from the households', firms', and governments' decisions

The emerging market economies are

in transition from state-owned production to free markets.

Goods and services are produced by using four factors of production

land, labor, capital, and entrepreneurship

Physical capital differences across countries can be seen in the fact that

more advanced economies typically have more sophisticated technology.

In the factor market, firms ________ and households ________.

pay rent, wages, interest, and profit; earn rent, wages, interest, and profit

In the goods market, firms ________ and households ________.

supply goods and services; purchase goods and services

The personal distribution of income shows

that the poorest 20 percent of households receive less than 4 percent of total income

Capital, as a factor of production, refers to

the tools and instruments used to produce other goods and services