There are 100 multiple choice questions. Choose the best response for each quest

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There are 100 multiple choice questions. Choose the best response for each question Good luck!! Section I Circular Flow 1) The simple circular flow model shows that: A) households are on the buying side of both prodact and resource markets. B) businesses are on the buying side of both product and resource markets. C) households are on the selling side of the resource market and on the buying side of the product market D) businesses are on the buying side of the product market and the selling side of the resource market. FIGURE RESOURCE MARKET BUSINESSES HOUSEHOLDS PRODUCT MARKET Refer to the Figure I above. Direct your attention to the outer flow. The portion represen by flow (1) represents: A) wages, interest, rent and profit income. B) land, labor, capital and entrepreneurship C) goods and services. D) consumer expenditures (consumption expenditure) 2) Section II Business Cycles Most economists agree that the immediate cause of the majority of cyclical change level of real output is unexpected changes in the: A) level of total spending, and aggregate demand B) rate of unemployment C) rate of inflation D) stock market price indexes 3) 4) Business cycles in economic activity are characterized by A) alternating periods of expansion and contraction B) market systems that lapse into command economies C) being unimportant to most economists D) swings in business profits, but little else

Explanation / Answer

1) The simple circular flow model shows that

C) Households are on the selling side of the resource market and on the buying side of the product market.
Households always buy goods so they are on the buying side of product market and sell from the resource market.

2) Refer to the figure 1. Direct your attention to the outer flow. This portion represents

c) Goods and services
Where households and businesses are involved with the product and resource markets definitely goods and services are only involved.

3) Most economists agree that the immediate cause of the majority of cyclical change level of outpur is unexpected changes in the
A) level of total spending and aggregate demand
The level of total spending determines the immediate cause of cyclical changes in the real output, spending levels are taken into consideration.

4) Business cycles in economic activity are characterized by
A) alternating periods of expansion and contraction
A business cycle is always characterized by five elements like the expansion, peak, recession, trough and recovery.

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