ECON CH 5 - CHAPTER 5 The U.S. Economy: Private and Public...

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CHAPTER 5 The U.S. Economy: Private and Public Sectors Topic Question numbers ___________________________________________________________________________________________________ 1. Personal and functional distribution of income 1-18 2. Legal forms of business 19-54 3. Economic functions of government 55-59 4. Spillover costs and benefits 60-86 5. Public goods 87-109 6. Stabilization 110-113 7. Government in circular flow 114-124 8. Purchases, transfers, and government size 125-133 9. Federal finance and progressive taxes 134-161 10.State and local finance 162-168 Last Word 169-172 True-False 173-196 ___________________________________________________________________________________________________ Multiple Choice Questions Personal and functional distribution of income 1. The personal distribution of income refers to the: A) division of income between personal taxes, consumption expenditures, and saving. B) division of income on the basis of industry sources, for example, agriculture, transportation, and mining. C) distribution of income to basic resource classes, that is, wages, rents, interest, and profits. D) way income is distributed among specific households or spending units. 2. The functional distribution of income refers to the: A) division of income between personal taxes, consumption expenditures, and saving. B) division of income on the basis of industry sources, for example, agriculture, transportation, mining, etc. C) distribution of income to basic resource classes, that is, wages, rents, interest, and profits. D) way income is distributed among specific households or spending units. 3. Income data that show the percentage of total income received by each fifth of all households describe the: A) functional distribution of income. B) horizontal distribution of income. C) personal distribution of income. Page 1
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D) vertical distribution of income. 4. Income data that show how total income is distributed as wages, rents, interest, and profits describe the: A) functional distribution of income. B) horizontal distribution of income. C) personal distribution of income. D) vertical distribution of income. 5. The personal distribution of income in the United States is such that the richest fifth receives about _____ percent of personal income. A) 30 B) 40 C) 50 D) 60 6. The largest functional share of the national income consists of: A) wages and salaries. B) interest and rental income. C) proprietors' income, that is, the income of unincorporated businesses. D) corporate profits. Use the following to answer questions 7-9: 7. In the above diagrams for a hypothetical economy, Figure 1 shows the: A) personal distribution of income. B) functional distribution of income. C)
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This note was uploaded on 06/25/2008 for the course ECON 203 taught by Professor Zippper during the Fall '07 term at Lone Star College.

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ECON CH 5 - CHAPTER 5 The U.S. Economy: Private and Public...

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