ECON- Chapter 2

In a command economy, who answers the 3 economic questions?

• The Tribe (Native Americans)

• The Government

• Individuals

• None of the Above

Who is a traditional economy centered around?

• The government

• Businesses

• The Chief/Elders

• Individuals

In a traditional economy, they use new technology and you can have any job that you want.

• True

• False

Which one of these best explains why the United States does not meet their 6 economic goals?

• Unemployment

• Too much freedom of choice in the market

• We always accomplish our goals

• Different political beliefs on how the economy should be run

True or False: for the three-sector circular flow model, when the government incurs a deficit, they borrow money from the capital market

• False

• True

What becomes the income of households?

• Expenditure of firms

• Resources from households

• Debt of government

• Taxes of government

In a 2 sector market, consumers and firms are linked through the _________ market where goods and services are sold.

• Product

• Factor

• Government

In a three-sector circular flow model, when the government spends more money than they bring in with taxes, what happens?

• Debt

• They can't pay their workers

• They can't purchase goods and services

• They will have a deficit

The circular flow model shows us the flow of what three things?

• Money, products, and land only

• Land, labor, and capital only

• Money, resources, and products

• Efficiency, labor, and taxes

What is the government's role in a Free Enterprise economic system?

• Keeping the peace

• To have control of all the factors of production

• To only encourage competition

• To regulate the economy