Economics 372 Assignment 1 ___ 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, t

Economics 372              Assignment 1

___ 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