1. The circular flow describes the process by which GDP generates____, which is spent on goods and services.
2. Labor and capital are exchanged in _________markets.
3. Which government department produces the National Income and Product Accounts?
a. The Department of Education
b. The Department of Commerce
c. The Congressional Budget Office
d. The Council of Economic Advisors
4. The provision of educational services is not counted as output in modern economies. ______________ (True/False)
5. Understanding the Circular Flow Diagram. In the circular flow diagram, why do the arrows corresponding to the flow of dollars and the arrows corresponding to the flow of goods go in the opposite direction?
6. Types of Income. Sometimes economists distinguish between wages on the one hand, and rents, interest, and profits on the other. What is the basis of that distinction?