Question

1. In 2006, which of Question #6 had the majority of firms within the U.S.?

A. Partnerships

B. Corporations

C. Proprietorships

D. None of the above

2. Give a scenario to determine if expenditure of an item(s) is classified as an investment or consumption? (Short Answer)

3. What does it mean to maintain a “basic” standard of living?

4. Define and Explain the purpose of “ I ” in GDP (At least 4 sentences):

5. What are the reasons firms tend to invest? (Short Answer):

6. What are the three types of business firms in the U.S.? Explain each. (Short Answer)

7. Define & Explain APS (also use an equation):

8. In 2006, which of Question #6 Had the majority of sales within the U.S.?

A. Partnerships

B. Corporations

C. Proprietorships

D. All of the above

9. The Average Propensity to Consume equation can be:

A. Assets - Liabilities

B. Consumption divided by Disposable Income

C. Consumption + Disposable Income

D. Saving divided by Disposable Income

10. Give one (1) economic role of the Government (Short Answer):

Answer 1

1.

A

2.

Expenditure upon an item for business purposes is considered as investments, whereas expenditure on items for personal usage is considered as consumption. Here, investment should help in production of goods and services. But, consumption satisfies the end needs of the people. Consumption does not create income for the individuals, but investment does it for the businesses.

3.

Maintaining a basic standard of living means, means fulfilling the basic needs of the individuals and family members (if any) and able to get the basic amenities required to maintain a basic quality of life. It is the bare minimum requirement, a person and or a family needs to survive and continue the efforts to grow.

4.

It means investment or private investment expenditure as a part of the GDP. It has the purpose to perform business activities and produce goods. while doing so, it caters the demand and creates jobs for the individuals. As a result, economy grows. It is the reason that government via fiscal policy and central banks (Fed in the USA) via monetary policy encourage business investment to help economy grow.

5.

Reasons are as follows:

A. It creates private property rights that are encouraged by the government.

B. It helps businesses to channelize the resources and create income for themselves.

C. It adds to build capacity and capabilities to cater the bigger demand.

D. It saves from volatility in demand and stockout risk.

E. It creates wealth.

Pl. repost other unanswered questions for their proper answers!