In the circular flow model, the business sector

Answer question 1-7

_ 1. In the circular flow model, the business sector _____ goods and services in _____ markets.

a. demands; product c. supplies; product

b. demands; resource d. supplies; resource

___ 2. In the circular flow model, the household sector _____ goods and services in _____ markets.

a. demands; product c. supplies; product

b. demands; resource d. supplies; resource

___ 3. In the circular flow model, the business sector _____ the factors of production (inputs) in _____ markets.

a. demands; product c. supplies; product

b. demands; resource d. supplies; resource

___ 4. In the circular flow model, the household sector _____ the factors of production (inputs) in _____ markets.

a. demands; product c. supplies; product

b. demands; resource d. supplies; resource

___ 5. Which of the following would best explain an increase in the demand for jeans?

a. A decrease in income, assuming jeans are normal goods

b. A decrease in the popularity of jeans

c. An increase in the number of schools that allow students to wear jeans

d. A decrease in the price of jeans

Use the data below to answer questions 6 – 7:

Consumption Expenditures (C) $12,100 billion

Investment Expenditures (I) $2,800 billion

Government Expenditures (G) $3,200 billion

Exports (EX) $2,500 billion

Imports (IM) $2,760 billion

Depreciation $2,200 billion

___ 6. Gross Domestic Product (GDP) is equal to ________.

a. $22,800 billion c. $25,560 billion

b. $19,760 billion d. $17,840 billion

___ 7. Net exports are equal to __________.

a. $5,260 billion c. –$260 billion

b. – $560 billion d. $2,500 billion