Personal Budgets and 4 Sectors of the Economy Review

Susie's family of 5 loves chicken nuggets. Ricky's family of 3 enjoys chicken wings. Emily's family of 8 also loves chicken nuggets.

How would a business MOST LIKELY change its production to keep the three families happy?

• It would produce the same amount of chicken nuggets and chicken wings.

• It would produce more chicken nuggets than chicken wings.

• It would produce more chicken wings than chicken nuggets.

• It would produce only chicken nuggets.

Which sector of the U.S. economy produces goods and services?

• Banking

• Private Business

• Government

• Consumers

What is the primary role of private business in the U.S. economy?

• To provide goods and services to consumers.

• To provide loans to people who want to purchase a home.

• To collect taxes to repave roads.

• To proviDe jobs to unemployed citizens.

What incentive do people get who put their money in a savings account?

• People earn interest on the money they place in a savings account.

• Loans are only given out to individuals who have an established savings account.  

• People can rest easy knowing their savings are in a private account.

• People pay interest on the money they put in their savings account.

WHY do banks loan money?

• To give people jobs.

• To earn interest on loans being paid back.

• To hire employees.

• To purchase a home.

Which TWO activities are examples of services that banks provide to individuals and businesses?

• building a new road and paying taxes on the new road

• provide a checking account for a new business and building a new road

• lending money for a new car and provide a checking account for a new business

• lending money for a new car and paying interest on a home loan

What is the function of the government in the U.S. economy?

• to make a profit by selling goods and services

• to create demand by selling goods and services at a higher price

• to provide loans to homeowners

• to collect taxes from households and businesses

What is one way government can use tax money?

• to purchase supplies to help start a business

• create a monopoly

• increase national security by hiring more soldiers

• give discounts on goods and services from private businesses

How will the price of a good decreasing affect the demand of that good?

• The price decreasing does not affect the demand.

• The demand will increase for the product.

• The demand will decrease for the product.

• Price does not play a factor in demand.

How do companies compete with each other?

• Business owners will charge a higher price so they can make more money.

• Companies need to make sure they have zero goods in common with other companies.

• Companies will need to keep their prices low and the quality of their goods and services high to get more consumers to purchase from their business.

• Companies need to spend money on marketing and advertising to compete.