B… Show more In a market economy, _____ own(s) all the bas

Custom Essays Economics B… Show more In a market economy, _____ own(s) all the bas

Economics

B… Show more In a market economy, _____ own(s) all the bas

B… Show more In a market economy, _____ own(s) all the basic resources or factors of production. A)households B)the federal government C)the Federal Reserve bank D)the local government E)business firms According to the circular flow of income, households interact with business firms by: A)buying resource services from business firms. B)paying wages for the use of labor. C)selling goods and services to firms. D)receiving payments from firms for use of resource services. E)paying rent to firms for the use of land. The circular flow of income model shows that, if households and firms were the only two sectors in the economy, then: A)income received by households is equal to the value of output produced by firms. B)households directly lend a part of their savings to firms. C)firms own the resources of production and rent it out to households. D)resources used in production flow from households to firms via the government. E)payments for goods and services flow from firms to households. Consider the circular flow of income model with households and firms as the two sectors. If business spending (investment) were suddenly decreased due to expectations of a dismal economy in the near future, then because total purchases would suddenly be reduced: A)the income created would be reduced, and the value of output and the value of income would decline. B)the income created would be reduced, and the value of output and the value of income would no longer be equal. C)the income created would be reduced, and the value of output and the value of income would increase. D)the income created would be reduced, and the value of output and the value of income would decline until the foreign sector was introduced. E)the household sector would try to save more. Financial intermediaries are best described as: A)informal institutions that provide funds to the government to manage budget deficits. B)institutions that accept deposits and make loans. C)institutions that control the money supply in the economy. D)institutions that invest in various business ventures. E)individuals who manage their client’s investment portfolios. Which of the following is not considered a financial intermediary? A)A commercial bank B)A savings and loan association C)The U.S. Department of Commerce D)A credit union E)An investment bank According to the circular flow diagram, with households and firms as the only two sectors, money saved by the households reenters the economy in the form of: A)human capital B)investment spending C)fiscal spending D)consumption spending E)deposits What is the total savings of the household sector? A)$35,000 B)$25,000 C)$17,500 D)$42,500 E)$45,000 Assume investment spending decreases by $4,000. Everything else being the same, what must be the new value of net trade flows in order to maintain total expenditures on business firms’ output at $35,000? A)-$2,500 B)-$1,500 C)$3,500 D)$6,500 E)$7,500 Calculate the total amount of consumption expenditure. A)$7,500 B)$25,000 C)$10,000 D)$42,500 E)$35,000 Suppose households reduce saving to $7,000. Everything else held constant, consumption spending must now be: A)$18,000 B)$22,500 C)$28,000 D)$32,000 E)$38,000 PLEASE LET ME KNOW IF YOU’RE CONFIDENT THAT YOUR ANSWERS ARE CORRECT SO THAT I CAN RATE YOU. I APPRECIATE ALL OF YOUR EXPERT ADVICE. • Show less

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