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The personal distribution of income refers to the?

way income is distributed among specific households or spending units.

The functional distribution of income refers to the?

distribution of income to basic resource classes, that is, wages, rents, interest, and profits.

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

consumption expenditures, taxes, and saving.

Listed in descending order of relative size, total consumption spending is comprised of?

services, nondurable goods, and durable goods.

What unusual event happened to U.S. households in 2005?

The rate of personal saving was negative.

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?

vertically integrated firm.

The advantages of the corporate form of business include?

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

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?

$5,000.

The separation of ownership and control in a corporation means that?

hired managers play a larger role in determining company policy than do a corporation's legal owners.

The U.S. Food Stamp program, which provides coupons that allow low-income individuals to buy food, is an illustration of?

the redistributional function of government.

For which of the following goods or services would a government subsidy be most likely to improve the allocation of resources?

cancer research.

The Federal government requires automobile manufacturers to install pollution control equipment. This is an illustration of the?

internalization of external costs.

Which of the following is most likely to be accompanied by external benefits?

being immunized for measles.

Which of the following is an example of a public good?

a fireworks display.

Government rather than private firms must provide economically desirable public goods because?

public goods have characteristics that make it difficult or impossible for private firms to produce them profitably.

An example of a quasi-public good is?

public higher education.

The public decision to build the interstate highway system is an example of?

the allocative function of government.

Refer to the above diagram. The movement from point b to point c can be achieved by?

increasing taxes and increasing government spending.

Government's economic role is complicated by the fact that?

economic decisions are made in a political context.

The addition of government to the circular-flow model illustrates that government?

purchases resources in the resource market, provides services to businesses and households, & purchases goods in the product market.

Government purchases and transfer payments?

differ because the former absorb resources while the latter do not.

The three most important sources of Federal tax revenue in order of descending importance are?

personal income, corporate income, and payroll taxes.

Which of the following is not an important source of revenue for the Federal government?

property taxes.

The tax represented above is?

progressive.

The essential difference between sales and excise taxes is that?

sales taxes apply to a wide range of products, while excises apply only to a select group of products.

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