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MacroReviewTest - MacroReviewTest Student 1 The two general...

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MacroReviewTest Student: ___________________________________________________________________________ 1. The two general types of economic systems that exist today are: A. market systems and capitalism. B. socialism and central planning. C. market systems and command systems. D. laissez faire systems and pure command systems. 2. Specialization in production is important primarily because it: A. results in greater total output. B. allows society to avoid the coincidence-of-wants problem. C. allows society to trade by barter. D. allows society to have fewer capital goods. 3. The coordination problem in the centrally planned economies refers to the idea that: A. planners had to direct required inputs to each enterprise. B. the price level and the level of employment were inversely related. C. the immediate effect of more investment was less consumption. D. exports had to be equal to imports for a central plan to work. 4. In terms of the circular flow diagram, households make expenditures in the _____ market and receive income through the _____ market. A. product; financial B. resource; product C. product; resource D. capital; product 5. In the circular flow model: A. households sell resources to firms. B. households receive income through the product market. C. households spend income in the resource market. D. businesses neither buy nor sell resources.
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6. Households and businesses are: A. both buyers in the resource market. B. both sellers in the product market. C. sellers in the resource and product markets respectively. D. sellers in the product and resource markets respectively. 7. In a competitive economy prices: A. influence consumers in their purchases of goods and services. B. influence businesses in their purchases of economic resources. C. influence workers in making occupational choices. D. do all of the above. 8. In a market economy the distribution of output will be determined primarily by: A. consumer needs and preferences. B. the quantities and prices of the resources that households supply. C. government regulations that provide a minimum income for all. D. a social consensus as to what distribution of income is most equitable. 9. The market system's answer to the fundamental question "Who will get the goods and services?" is essentially: A. "Those willing and able to pay for them." B. "Those who physically produced them." C. "Those who most need them." D. "Those who get utility from them." 10. The market system: A. produces considerable inefficiency in the use of scarce resources. B. effectively harnesses the incentives of workers and entrepreneurs. C. is inconsistent with freedom of choice in the long run. D. has slowly lost ground to emerging command systems. 11. The law of demand states that:
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MacroReviewTest - MacroReviewTest Student 1 The two general...

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