Circular Flow, Bus. Org, and Market Structures Assessment

What flows from businesses to households through the resource market?

• income

• expenses

• rent

• labor

Which statement about the relationships illustrated in the diagram is correct?

• The internal arrows represent the impact of fiscal policy and the external arrows represent the impact of monetary policy.

• The internal arrows represent the flow of money and the external arrows represent the flow of goods and resources.

• The internal arrows represent the flow of goods and resources and the external arrows represent the flow of money.

• The internal arrows represent the impact of monetary policy and the external arrows represent the impact of fiscal policy.

What type of transaction occurs in the resource market between households and businesses?

• Households sell the factors of production to businesses in exchange for income.

• Households spend their income to buy goods and services from businesses.

• Businesses invest in the human capital of households to increase their productivity.

• Businesses charge interest from households which is then reinvested in the business.

The circular flow model BEST represents which of the following economic topics? (EMI1B)DOK1

• scarcity

• economic interdependence

• economic growth

• economic freedom

What aspect of this situation involves the flow of money towards the business sector of the economy?

• Samantha depositing money into a savings account.

• The restaurant paying Samantha for her work.

• The restaurant giving Samantha an employee discount.

• Samantha buying food at the grocery store.

Which statement BEST explains the roles of businesses and households in the resource (factor) market?

• Households sell resources, while businesses buy resources.

• Households buy resources, while businesses sell resources.

• Both households and businesses buy resources.

• Both households and businesses sell resources.

What element flows from households to businesses through the product market?

• labor

• income

• income

• interest

Regarding corporations, what does "limited liability" refer to?

• If a corporation cannot pay its debts, the government secures the owners' investments.

• If a corporation fails, investors can sue the owners to recover part of their money.

• If a corporation cannot pay its debts, the owners' assets are protected from creditors.

• If a corporation fails, the government will buy the company if it is important to the economy.

Why might a business owner decide to form a limited liability company instead of operating as a sole proprietor?

• to protect their personal assets from being seized through lawsuits

• to protect corporate assets from being seized through lawsuits

• to raise large amounts of capital by selling shares of their company

• to create the simplest type of organizational structure for their business

Which of the following is a characteristic shared by most sole proprietorships and partnerships?

• unlimited life

• unlimited liability

• secured investors

• boards of directors