Year 8 Economics Revision Quiz Term 3

The two-way mutual relationship between sectors is known as ..........

...............can exist in a physical location, it can be spread across a number of locations, or can have no physical location at all

Disposable income is

• the amount of money that households have available for spending and saving after income taxes have been accounted for and essential needs have been met

• Money left-over after households pay for needs and wants; they may choose to place this money in a financial intermediary to earn interest.

• Expenditure by the federal government to provide services for the community such as welfare , health and education.

• Borrowing money from a bank and paying this off over time with interest.

A market economy means decisions are made by

• the government

• the consumers and producers

• the financial sector

• the external sector

Savings is an example of a flow of income between households and the financial sector and is called a leakage.

• True

• False

A market relies on what 2 factors?

• Credit

• Savings

• Specialisation

• Exchange

What were the benefits of specialisation?

• A wider variety of goods and services could be produced

• A smarter person could make more money

• People could only trade if they had many goods

• There are no benefits to specialisation

A market refers to a situation where buyers and sellers interact in the organised exchange of economic resources for goods and services.

• True

• False

What are the features of a market economy

• Resources are only used to produce goods and services that consumers will buy and that are profitable.

• The market system allows consumers to communicate their spending preferences to producers.

• A market is a situation where the organised exchange of goods and services takes place between buyers and sellers.

• Goods are sold by producers at the highest possible price that consumers are willing to pay.

The two sector circular flow model includes

• Households

• Financial

• Producers

• Government