The US Economy: Private And Public Sectors Quiz

30 Questions | Total Attempts: 740

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Economy Quizzes & Trivia

The private sector is part of a country's economic system that is run by individuals and companies. In a good business economy, the public sector should not suffocate private sectors. How well do you understand the public and private sectors in the US economy? Take the quiz to find out.


Questions and Answers
  • 1. 
    The personal distribution of income describes the manner in which society's total personal income is divided among wages and salaries, corporate profits, proprietors' income, interest, and rents.
    • A. 

      True

    • B. 

      False

  • 2. 
    Personal taxes have risen in relative terms since World War II.
    • A. 

      True

    • B. 

      False

  • 3. 
    Most of the personal saving in the US economy is done by those households in the top 10% of its income receivers.
    • A. 

      True

    • B. 

      False

  • 4. 
    Dissaving means that personal consumption expenditures exceed after-tax income.
    • A. 

      True

    • B. 

      False

  • 5. 
    A durable good is defined as a good that last has an expected life of 3 years or more.
    • A. 

      True

    • B. 

      False

  • 6. 
    A plant is defined as a group of firms under a single management.
    • A. 

      True

    • B. 

      False

  • 7. 
    An industry is a group of firms that produce the same or nearly the same product.
    • A. 

      True

    • B. 

      False

  • 8. 
    Limited liability refers to the fact that all members of a partnership are liable for the debts incurred by one another.
    • A. 

      True

    • B. 

      False

  • 9. 
    The corporate form of organization is the least used by firms in the US.
    • A. 

      True

    • B. 

      False

  • 10. 
    The corporation in the US has a tax advantage over other legal forms of business organization.
    • A. 

      True

    • B. 

      False

  • 11. 
    Whether a business firm should incorporate or not depends chiefly on the amount of money capital it must have to finance the enterprise.
    • A. 

      True

    • B. 

      False

  • 12. 
    A limited liability corporation is like an ordinary partnership for tax purposes, but like a corporation in matters of liability.
    • A. 

      True

    • B. 

      False

  • 13. 
    Bonds are shares of ownership in a corporation.
    • A. 

      True

    • B. 

      False

  • 14. 
    When the interests of the principals are the same as those of agents, there is a free-rider problem.
    • A. 

      True

    • B. 

      False

  • 15. 
    When the Federal government provides for a monetary system, it is doing so primarily to maintain competition.
    • A. 

      True

    • B. 

      False

  • 16. 
    Transfer payments are one means government uses to redistribute income.
    • A. 

      True

    • B. 

      False

  • 17. 
    If demand and supply reflected all the benefits and costs of producing a product, there would be efficient resource use.
    • A. 

      True

    • B. 

      False

  • 18. 
    When there are spillover costs, more resources are allocated to the production of the product and more is produced than is efficient.
    • A. 

      True

    • B. 

      False

  • 19. 
    One way for government to correct spillover costs from a product is to increase its demand.
    • A. 

      True

    • B. 

      False

  • 20. 
    When there are spillover benefits from a product, there will be an overallocation of resources for its production.
    • A. 

      True

    • B. 

      False

  • 21. 
    One way for government to correct spillover benefits from a product is to subsidize consumers of the product.
    • A. 

      True

    • B. 

      False

  • 22. 
    Using the exclusion principle, government provides public goods so as to exclude private businesses from providing them.
    • A. 

      True

    • B. 

      False

  • 23. 
    Obtaining the benefits of private goods requires that they be purchased; obtaining the benefits from public goods requires only that they be produced.
    • A. 

      True

    • B. 

      False

  • 24. 
    Governments have provided lighthouse services because these services have public benefits and because private producers of such services experience the free-rider problem.
    • A. 

      True

    • B. 

      False

  • 25. 
    When the Federal government takes actions to control unemployment or inflation it is performing the allocation function of government.
    • A. 

      True

    • B. 

      False

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