Test Midterm Exam This midterm exam consist of 35 multiple choice questions and covers the material in Chapters 1 through 7. There are five questions from each Chapter. Question 1: If the economy is operating at full employment and using resources efficiently, then an increase in spending for homeland security this year will: Answer correct Answer: be possible if resources are reallocated to homeland security services, but it will also mean that the output of some other goods and services will have to fall.

Question 2 Following the circular flow of a mixed economy, firms receive a flow of dollars from and send goods and services to: Answer Correct Answer: Output Markets.

Question 3 5 out of 5 points

In 2008, which country listed below has the highest percentage of government...