The functions of four major sectors

Why do households sell their labor to businesses?

• They receive income in exchange for labor.

• They receive tax money in exchange for labor.

• They receive small business loans in exchange for labor.

• They receive government services in exchange for labor.

Use the information to answer the question.

“I want to open my own restaurant. I will need to take out a loan from my bank.” -Jayla Smith, Entrepreneur

Which of the following BEST explains what should Jayla expect by taking a loan from her bank?

• to have to pay her employees their monthly salaries

• to repay the bank based on the amount of the loan plus interest

• to receive money from her employees to help her repay the loan

• to be so successful that she will be able to repay the loan in full right away

Which of the four sectors of the U.S. economy is formed by profit-seeking entrepreneurs who use resources to produce goods and services to sell?

• banks

• households

• government

• private businesses

What is the main way that most households and private businesses support the government economically?

• They pay taxes to the government.

• They provide loans to the government.

• They perform services for the government.

• They purchase services from the government.

Why do banks loan money to households and businesses?

• because the government pays banks for providing the loans

• because banks earn a profit by charging interest on the loans

• because banks are publicly funded and provide public services

• because the loans are used to buy goods produced by the banks

What is one benefit of depositing your money into a savings account versus a checking account?

• to earn the most money on the deposit

• to use the money to pay monthly bills and expenses

• to make sure the bank has enough cash to cover their deposit

• to make sure they pay the lowest possible tax rate on the deposit