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I. Instruction: Indicate your answer by writing the letter in the space provided before the statement that contains the best answer for each of the

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I. Instruction: Indicate your answer by writing the letter in the space provided before the statement that contains the best answer for each of the following questions. The relationship between Households and Firms is best described as... 1. Independent b. Interdependent The term Households, refers to all the consumers in our economy True b. False Firms sell their resources to Households, and in exchange they are paid an income True b. False Households sell goods and services to Firms a. True b. False 5. Capital... a. is the ability to combine all 4 resources is the human made items used in the production process. Individuals sell to businesses and in return individuals earn an a. profit, income C- resources, income b. resources, products d. profit, individuals 7. Businesses sell to individuals and in return businesses earn a a. products, profit C. resources, profit b. businesses, individuals d. income, profit 8. Money taken by the government from the amount individuals or businesses make at work. This can be defined as.... a. Interest Rate c. Currency b. Money d. Income Tax 9. How do governments get their money? a. Tax Businesses b. Tax Households c. Tax both Businesses and Households d. They print their own money 10. In which market do businesses sell? a. Product Market C. Market Economy b. Factor Market d. Fresh Market 1 1. In which market do households sell? a. Product Market c. Market Economy b. Factor Market d. Fresh Market 12. What do Governments give to both businesses and households? Taxes c. Goods & Services b. A headache d. Opportunity Costs 13. What is another term for businesses according to the Circular Flow? a. Firms C. Companies b. Organizations d. Corporations 14. What is another term for Households? Factors C. Consumers b. Apartments d. Private Entities 15. Why is the Circular Flow in the shape of a circle? a. Because of the way it is b. Because money flows from businesses to households and back to businesses C. Because the circle represents completion d. Because circles are the easiest shape to draw

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