question

functional distribution of income.

answer

Income data that show how total income is distributed as wages, rents, interest, and profits describe the

question

50

answer

The personal distribution of income in the United States is such that the richest fifth receives about _____ percent of personal income

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wages and salaries

answer

The largest functional share of the national income consists of

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the functional distribution of income

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The distribution of income among the owners of land, labor, capital, and entrepreneurial ability is known as

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consumption expenditures, taxes, and saving

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Listed in descending order of relative size, households divide their total incomes among

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is $30 billion

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If the aggregate income of households is $300 billion, consumption is $210 billion, and personal taxes are $60 billion, then personal saving:

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that part of after-tax income which is not consumed

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Economists define "saving" as:

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vertically integrated firm

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A firm that produces a single product but owns plants in many different stages of the production process-for example, a steel producer that owns iron ore mines and rolling mills-best illustrates a:

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conglomerate

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A firm comprised of plants or units operating in different industries, say, beer and theme parks, best illustrates a:

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Proprietorships

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Which of the following is numerically the dominant type of business in the United States?

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corporations

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Which form of business enterprise accounts for the largest proportion of total output?

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the ability to raise financial capital by selling stocks and bonds.

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The advantages of the corporate form of business include:

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only the value of their stock

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If a corporation goes bankrupt, its stockholders will lose:

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dividends are taxed both as corporate income and as income to stockholders

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A major disadvantage of corporations is that:

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$5,000.

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Suppose you own $50,000 of personal property, $5,000 of stock in General Statics Corporation, a $10,000 savings account, and $20,000 of government bonds. If General Statics goes bankrupt, the most you could lose is

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both a proprietorship and a partnership

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The owners of a firm face unlimited liability for the firm's debts in:

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Spillover benefits

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benefits that accrue to parties other than the producer and buyer of a good.

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involve spillover costs (external costs).

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A pure market economy overallocates resources to the production of goods that:

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discouraged by taxes or regulation

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If an activity creates sizable external costs as well as private costs, then economic theory suggest the activity should be:

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little of the good will be produced unless firms are subsidized

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If a good's production creates substantial spillover benefits and no spillover costs, then too:

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equilibrium output will exceed the most efficient output.

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If spillover costs are not internalized, the:

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entails external benefits

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People with more education are less likely to be involved in crime than others. This suggests that education:

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private firms cannot restrict the benefits of such goods to consumers who are willing to pay for them.

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The market system fails to produce public goods because:

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progressive tax

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tax rates are higher the greater one's income

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A nation's gross domestic product (GDP)

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is the dollar value of the total output produced within the borders of the nation.

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A nation's gross domestic product (GDP)

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can be found by summing C + Ig + G + Xn.

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only counting final goods

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National income accountants can avoid multiple counting by

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final goods and services

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goods and services purchased by ultimate users, as opposed to resale or further processing.

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a haircut

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Which of the following is a final good or service? a) diesel fuel bought for a delivery truck b) fertilizer purchased by a farm supplier c) a haircut d) Chevrolet windows purchased by a General Motors assembly plant

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the purchase of baseball bats by a professional baseball team

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Which of the following is an intermediate good? a) the purchase of gasoline for a ski trip to Colorado b) the purchase of a pizza by a college student. c) the purchase of baseball bats by a professional baseball team. d) the purchase of jogging shoes by a professor

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productive but is excluded from GDP because no market transaction occurs.

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Tom Atoe grows tomatoes for home consumption. This activity is:

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automobiles for personal use, but not houses.

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In national income accounting, consumption expenditures include purchases of:

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exports less imports.

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Net exports are:

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the purchase of 100 shares of AT by a retired business executive

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Which of the following is not economic investment? a) the purchase of a drill press by the Ajax Manufacturing Company b) the purchase of 100 shares of AT by a retired business executive c) construction of a suburban housing project d) the piling up of inventories on a grocer's shelf

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add $10 billion to other elements of investment in calculating total investment

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Suppose that inventories were $40 billion in 2000 and $50 billion in 2001. In 2001, accountants would:

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not counted

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In calculating GDP, governmental transfer payments, such as social security or unemployment compensation, are:

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consumption

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The largest component of total expenditures in the United States is:

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of $18 million has occurred

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The ZZZ Corporation issued $25 million in new common stock in 2001. It used $18 million of the proceeds to replace obsolete equipment in its factory and $7 million to repay bank loans. As a result, investment:

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investment in 2001 and as disinvestment in 2002.

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In 2001 Trailblazer Bicycle Company produced a mountain bike which was delivered to a retail outlet in November of 2001. The bicycle was sold to E.Z. Ryder in March of 2002. This bicycle is counted as:

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the production of 1933's GDP used up more capital goods than were produced in that year.

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In 1933 net private domestic investment was a minus $6.0 billion. This means that:

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subtracting NDP from GDP

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Consumption of fixed capital (depreciation) can be determined by:

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Value added

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the difference between the value of a firm's output and the value of the inputs it has purchased from others.

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national income

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all incomes earned by U.S. resource suppliers for their current contributions to production

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compensation of employees

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The largest component of national income is:

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income received by households less personal taxes

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Which of the following best defines disposable income?

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Real GDP

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GDP data that have been adjusted for changes in the price level.

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consumer price index (CPI)

answer

measures changes in the prices of a market basket of some 300 goods and services purchased by urban consumers.

Economics ch. 5 + 7 – Flashcards

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