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Practice test 2 - Leakages from the circular flow consist...

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Leakages from the circular flow consist of Correct Answer: saving, taxes, and imports. Which of the following is not a productive resource? Correct Answer: Money. Transfer payments include all but which one of the following? Correct Answer: The purchase of new computers by the IRS. In a market economy, what to produce is primarily decided by Correct Answer: consumers. In a market economic system, the productive resources are owned by Correct Answer: individuals. Specialization and trade exist because Correct Answer: individuals' and nations' opportunity costs are different. When the government levies a tax on gasoline and uses the proceeds to build roads in low-income neighborhoods, which function(s) of government is (are) being carried out? Correct Answer: Both allocation and redistribution. An economist would regard a payment to a physician as Correct Answer: a wage. When the government redistributes income, it is answering a basic economic . Which one? Correct Answer: For whom? A good that is nonrival in consumption and not subject to exclusion is called a Correct Answer: public good. Specialization and trade exist because Correct Answer: individuals' and nations' opportunity costs are different. Resource markets include Correct Answer: the market for baseball players. In a market economy, what to produce is primarily decided by Correct Answer: consumers. The circular flow model illustrates Correct Answer: how the product and resource markets are related.
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