Circular Flow of Income

It is the branch of economics that deals with the structure, performance, behavior, and decision making of the whole, or aggregate, economy.

• Macroeconomics

• Microeconomics

This studies economy-wide phenomena.

• Macroeconomics

• Microeconomics

Income flow = Expenditure flow

• True

• False

The following are factors of production except

• Land

• Labor

• Wage

• Entrepreneurship

Which of the following is a leakage?

• Investment

• Government spending

• Import

• Export

Which of the following is an injection?

• Savings

• Investment

• Taxes

• Imports

What is the payment received for capital?

• Rent

• Wages

• Interest

• Profit

What is the payment received for labor?

• Rent

• Wages

• Interest

• Profit

What happens to the size of income flow when leakages are larger than injections?

• Nothing happens.

• The size of circular flow becomes smaller.

• The size of circular flow becomes larger.

What happens to the size of income flow when injections are larger than leakages?

• Nothing happens.

• The size of circular flow becomes smaller.

• The size of circular flow becomes larger.