Pearson ch 11 economic performance

Within the circular flow, there are two markets. These markets are the

• market for firms to sell goods and the market for firms to sell services.
• goods market and the factors of production 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.

The circular flow model shows that goods and services flow from

• businesses to households. 
• households to business.
• the resource market to businesses. 
• the product market to businesses. 

In the circular flow model, which of the following owns the factors of production?

• government
• only households
• only businesses
• both businesses and households

In the circular flow model, which of the following flows in the opposite direction from the flow of factors of production?

• finished goods and services
• wages, rent, interest, and profit 
• transfer payments from government
• firm's profit incentives

What is the money that remains after the cost of production have been paid?

• Profit
• Bonus
• Salary
• Output

declining unemployment rate, prices slowly rise

• Expansion
• Peak
• Contraction
• Trough

Unemployment is highest during the

• Expansion
• Peak
• Contraction
• Trough

Prices are at their highest point

• Expansion
• Peak
• Contraction
• Trough

Investment is at its lowest point

• Expansion
• Peak
• Contraction
• Trough

Prices are lowered to clear inventory (Surplus or stored stock)

• Expansion
• Peak
• Contraction
• Trough