1. The world population is approximately ____ people.

a)7 million

b)2 trillion

c)7 billion

d)1.4 trillion

e)e. 70 million

2. The percentage of the world's population that lives in the advanced economies is

a.more than 71 percent

b.between 51 percent and 70 percent

c.between 31 percent and 50 percent

d.between 20 percent and 30 percent

e.less than 20 percent

3. Which of following groups of countries are all advanced economies?

a.Australia, Brazil, and the United States

b.Hong Kong, Japan, France, and the United Kingdom

c.Italy, the United States, China, and Russia

d.Singapore, Russia, France, and Chad

e.Mexico, Canada, Germany, and Egypt

4. The emerging market economies are

a.the largest grouping including the nations of China and India

b.in transition from state-owned production to free markets

c.most of the nations of Western Europe

d.the nations that are currently agricultural in nature

e.the nations with the highest standards of living

5. Production in the advanced economies is about ____ percent of total world production and in the emerging market and developing economies is about ____ percent of total world production.

a.50; 39

b.23; 62

c.50; 22

d.30; 46

e.20; 73

6. Compared to the developing economies, the advanced economies have ____ human capital and ____ physical capital.

a.more; more

b.more; less

c.the same; the same

d.less; more

e.less; less

7. In the advanced economies, ____ of the factories use advanced capital equipment and in the developing economies ____ of the factories use advanced capital equipment.

a.virtually all; virtually all

b.some; some

c.virtually all; none

d.some; none of

e.virtually all; some

8. Among the United States, China, Russia, India, and Brazil, the country with the highest average income per person is

a.the United States

b.Russia

c.India

d.China

e.Brazil

9. Within the circular flow model, economists define households as

a.families with at least 2 children

b.families living in their own houses

c.individuals or groups living together

d.married or engaged couples

e.individuals or groups within the same legally defined family

10. A market is defined as:

a)the physical place where goods (but not services) are sold

b)the physical place where goods and services are sold

c)any arrangement that brings buyers and sellers together

d)a place where money is exchanged for goods

e)another name for a store

11. In the circular flow model:

a.only firms sell in markets

b.only households buy from markets

c.some firms only sell and some firms only buy

d.the money used to buy goods and the goods themselves travel in the same direction

e.both firms and households buy or sell indifferent markets

12. ____ choose the quantities of goods and services to produce, while ____ choose the quantities of goods and services to buy.

a.Households; firms

b.Firms; households and the government

c.The government; firms

d.Firms; only households

e.Households; the government

13. A circular flow model shows the interrelationship between the ____ market and the ____ markets.

a.household; goods

b.household; factor

c.business; household

d.expenditure; income

e.goods; factor

14. In the circular flow model, the expenditures on goods and services flow in the

a.same direction as goods and services in all cases

b.same direction as goods and services only if they both flow through the goods market

c.same direction as goods and services only if they both flow through the factor market

d.opposite direction as goods and services

e.same direction as factor markets

15. Of the following, which is not a source of revenue for the federal government?

a.personal income taxes

b.sales taxes

c.corporate income taxes

d.Social Security taxes

e.None of the above are correct; that is, they are all sources of revenue for the federal government

16. U.S. exports of goods and services flow to households and firms in ____ and U.S. financial inflows of capital flow to households and firms in ____.

a.the United States; the United States

b.the United States; the rest of the world

c.the rest of the world; the United States

d.the rest of the world; the rest of the world

the United States; the rest of the world and the United States