Circular Flow of a Mixed Economy Have Notebooks Out Test on Next Friday

Government’s Role in a Mixed Economy The government purchases land, labor, and capital from households in the factor market, and Purchases goods and services in the product market. monetary flow physical flow Circular Flow Diagram of a Mixed Economy Households Firms Product market taxes government purchases Government expenditures government-owned factors taxes Factor market

Questions 1. Give an example of a productive resource that households sell to government. 2. Give an example of a good or service that businesses sell to government. 3. Give an example of a good or service that government provides to households in exchange for money payments, mainly taxes. 4. Give an example of a good or service that government provides to businesses in exchange for money payments.

Transactions 1.Ted sold the trees on 500 acres of land he owned to a lumber company that cut them down to make lumber.

2. Maria received a $200 interest payment from a business to which she had lent money.

3.The Amalgamated Shoe Company sent 5,000 pairs of shoes to a major discount store.

4.Terry paid $75 for a new jacket.

5. A business paid Amy $4,000 a month to use a building she owns.

6.Jane received a paycheck for $675.80 from her employer.

7. The Ajax Cleaning Company came to Frank’s house and cleaned his carpet.

8. Larry earned $35,000 last year from the restaurant he owns.

9. Jason bought a new battery for his car.

10. Sara paid the bill for her charge card at a department store.