Replace CFA #4 (SSEMI)

SSEMI 1 a: Which statement is true about the circular flow diagram?

• Households are demanders in the product market and suppliers in the factor market

• Business are demanders in the product market and suppliers in the factor market.

• Households are demanders in the factor market and suppliers in the product market.

• Businesses and households are not components of the circular flow diagram.

SSEMI 1 b: The primary of role of money in the economy is to

• help set interest rates at financial institutions.

• provide a mechanism to assist foreign trade.

• serve as a medium of exchange for goods and services.

• identify prices in various markets.

SSEMI1 a: The DASHED arrows on this circular flow diagram represent the flow of

• goods and services.

• money.

• taxes.

• imports and exports.

SSEMI1 a: The SOLID arrows on this circular flow diagram represent the flow of

• goods and services.

• money.

• taxes.

• imports and exports.

Look at the picture.  What should replace Y?

• Consumers
• Firms
• Factors
• Revenue

The circular flow model of a market economy shows

• how profits are made
• what inputs are required for what outputs
• how many firms can support the needs of how many households
• the interactions between households and  firms in the free market

In the circular flow model, the product market describes _____.

• stores that sell goods and services to households
• the government paying for public goods
• households selling their labor to businesses
• households receive income from businesses

The Market for labor would be considered a ______________ market.

• Product
• Factor
• Wage
• Monopolistic

SSEMI1 In which market do consumers purchase goods and services?

• Factor 
• Product
• Households
• none of the above

SSEMI1 In which market do Firms purchase the scarce resources from households?

• Factor 
• Product
• Households
• none of the above