United States Economy #1

In the United States, most decisions regarding the production of goods and services are made -

• in the private sector
• by the government
• by trade with foregin nations
• by federal law

Profit = ? - Expenses Which of the following best replaces the question mark in this equation?

• Captial
• Property
• Income
• Proprietorship

The United States has a __ economy

• traditional
• command
• free market
• mixed

Which characteristic of the United States Economy results in better quality of goods and services at lower prices?

• Competition

• Profit
• Limited government
• Private property

What type of business organization has the advantage of limited liability?

• Partnership
• Entrepreneurship
• Corporation
• Proprietorship

In the circular flow of economic activity, individuals sell their labor in return for -

• profits
• wages
• rent
• interest

Whose role in the economic flow is to own and sell resources?

• Government
• Businesses
• Individuals
• Markets

Banks play an important role in the economy by -

• making production decisions
• regulating businesses
• printing money
• linking savers and borrowers

What does a bank do with most money of the deposits it takes in?

• Keeps the money safe in its vault
• Keeps the money safe by depositing it at a Federal Reserve Bank
• Uses the money to buy stock in corporations
• Lends the money to qualified borrowers

The use of technological innovations such as the Internet -

• has falled during the last few decades
• lowers the cost of production
• makes markets less efficient
• makes outsourcing very difficult to do