141) Of the following, the largest source of tax revenue collected by state and local governments comes

141)

from

A) sales taxes.

B) individual income taxes.

C) lottery revenues.

D) corporate income taxes.

E) death taxes.

142) The productive resource that includes all the “gifts of nature” is called

142)

A) entrepreneurship.

B) land.

C) land if undeveloped and capital if developed.

D) labor.

E) capital.

143) Households and firms in the U.S. economy interact with those in the rest of the world in the

143)

________ market and in the ________ market.

A) goods; factor

B) government; goods

C) firm; government

D) goods; financial

E) financial; factor

48

144) Property taxes are a major source of revenue for

144)

A) state and local governments.

B) the federal governments.

C) firms wanting to relocate their operations.

D) consumers.

E) the federal, state, and local governments.

145) An export good is a good produced

145)

A) .png”>by foreigners in the United States and purchased by U.S. households.

B) in another country and purchased by foreigners not residing in the United States.

C) in another country and purchased by U.S. residents.

D) in the United States and sold to foreigners living in the United States.

E) in the United States and sold in other countries.

.png”>

146) As a factor of production, oil reserves are counted as

146)

A) labor.

B) capital.

C) financial capital.

D) entrepreneurship.

E) land.

147) The personal distribution of income shows

147)

A) .png”>that the richest 20 percent of households receive 23 percent of total income.

B) that labor receives the largest percentage of total income.

C) how profit accounts for the largest fraction of total income.

D) that the poorest 20 percent of households receive less than 4 percent of total income.

E) that interest accounts for most of the income of the richest 20 percent of households.

.png”>

49

148) Goods and services bought by the government account for about ________ percent of total

148)

production.

A) 17

B) 67

C) 2

D) 8

E) 35

.png”>

149) The national debt is the total amount the ________ government has borrowed to make expenditures 149) that ________ tax revenue.

A) .png”>federal; exceed

B) state and local; exceed

C) state and local; are less than

D) federal; are less than

E) federal; are equal to

150) Payments to the factors of production are

150)

A) rent, wages, profit or loss, and bonus.

B) rent, interest, bonds, and profit or loss.

C) land, labor, capital, and entrepreneurship.

D) rent, mortgage, interest, and bonds.

E) rent, wages, interest, and profit or loss.

.png”>

31) When Ethan continues his education beyond high school he is increasing his

31)

A) capital.

B) rent.

C) human capital.

D) wage rate.

E) quantity of labor.

32)Which of the following are sources of revenue for state and local governments?

32)

i)

property taxes

ii)

sales taxes

iii) transfers from the federal government

A) i only

B) i, ii and iii

C) i and iii

D) ii and iii

E) i and ii

33) Which of the following correctly lists the categories of factors of production?

33)

A) machines, buildings, land, and money

B) hardware, software, land, and money

C) land, labor, capital, and entrepreneurship

D) owners, workers, and consumers

E) capital, money, and labor

.png”>.png”>.png”>.png”>

9

34) In the goods market, firms ________ and households ________.

34)

A) purchase goods and services; supply goods and services

B) hire land, labor, capital, and entrepreneurship services; supply goods and services

C) supply land, labor, capital, and entrepreneurship services; hire land, labor, capital, and entrepreneurship services

D) pay rent, wages, interest, and profit:; earn rent, wages, interest, and profit

E) supply goods and services; purchase goods and services

.png”>

)

35) In the circular flow model with the government sector, transfers

35)

A) to households flow in the same direction as do expenditures on goods and services.

B) flow in the same direction as do taxes.

C) flow only through the goods market.

D) to firms flow in the same direction as do rent, wages, interest, and profits.

E) flow in the opposite direction as do taxes.

.png”>

36) As the circular flow model shows, the factors of production flow from

36)

A) households to firms through the goods market.

.png”>B) firms to households through the factor market.

C) firms to households through the goods market.

D) the goods market through firms to the factor markets.

E) households to firms through the factor market.

10

.png”>

The figure above shows governments in the circular flow.

37) In the figure above, firms

37)

A) receive transfers from governments through factor markets.

B) sell goods and services to governments in goods markets.

C) own factors of production.

D) pay taxes directly to governments.

E) do all of the above.

.png”>

11

38)In the figure above, which of the following is true?

38)

i. Governments coordinate economic activities of households and firms.

ii. Governments buy goods and services in goods markets.

iii. Households pay taxes directly to firms.

.png”>A) Only i B) ii and iii C) Only iii D) Only ii E) i and ii

39) Most countries in the world are classified as

39)

A) developing.

B) advanced.

C) emerging market.

D) industrialized.

E) in transition.

40) ________ paid for the use of land; ________ paid for the services of labor; and ________ paid for the

40)

use of capital.

A) Rent is; wages are; profit is

B) Mortgages are; interest is; wages are

C) Rent is; wages are; interest is

D) Rent is; interest is; wages are

E) Interest is; wages are; profit is