Question : 61) A circular flow model shows the interrelationship between the : 1240743

61) A circular flow model shows the interrelationship between the ________ markets and the ________ markets.

A) household; goods

B) household; factor

C) business; household

D) expenditure; income

E) goods; factor

62) In the circular flow model, the expenditures on goods and services flow in the

A) same direction as goods and services in all cases.

B) same direction as goods and services only if they both flow through the goods market.

C) same direction as goods and services only if they both flow through the factor market.

D) opposite direction as goods and services.

E) same direction as factor markets.

63) Households receive transfers from ________, and firms receive transfers from ________.

A) government; government

B) firms; households

C) government; government and households

D) firms and government; government

E) government; no one

64) Of the following, the largest source of revenue for the federal government is

A) personal income taxes.

B) sales taxes.

C) corporate income taxes.

D) property taxes.

E) lottery revenue.

65) ________ are the largest components of state and local government revenue.

A) Transfers from federal government and corporate income taxes

B) Transfers from federal government and sales taxes

C) Individual income taxes and corporate income taxes

D) Individual income taxes and sales taxes

E) Corporate income taxes and lottery income

66) U.S. exports of goods and services flow to households and firms in ________, and U.S. financial inflows of capital flow to households and firms in ________.

A) the United States; the United States

B) the United States; the rest of the world

C) the rest of the world; the United States

D) the rest of the world; the rest of the world

E) the United States; the rest of the world and the United States

2.4   Integrative Questions

1) If a product becomes more popular and consumers want more produced, which of the following best describes what happens to move more factors of production into that industry?

A) An agency of the Federal government directs the movement of factors.

B) The chief executive officers or presidents of corporations require that factors leave one industry and move to the other industry.

C) Factor owners voluntarily move their factors because they want to satisfy the interests of consumers.

D) Wages, rent, interest, and profit increase in that industry, thereby giving factors the incentive to move to that industry.

E) Consumers increase their demand for the products and, as a result, the taxes the producers must pay decrease enabling the producers to hire more factors of production.

2) What determines the income flows that households receive?

A) an agency of the Federal government

B) what they choose to produce, how much is sold, and the price received when sold

C) their ownership of factors of production, how much they sell in the factor markets, and the prices received when sold

D) financial institutions such as banks

E) what they choose to consume

3) What determines the revenue flows received by businesses?

A) an agency of the Federal government

B) what they choose to produce, how much is sold, and the price received when sold

C) their ownership of factors of production, how much they sell in the factor markets, and the prices received when sold

D) financial institutions such as banks

E) what they pay the factors of production they employ