The nature of the economy

The sectors that make up the simple TWO sector circular flow model are the

• Household, Government, Financial sector, Overseas sector and Firms sector

• Household sector and Firms sector

• Household sector and Government sector

• household sector and Financial sector

In the two sector model, Households provide resources to firms. What is NOT one of these resources

• Land

• Labour

• Finance

• Entrepreneurship

Which of the following is not a sector in the circular flow model?

• Government

• Overseas

• Financial Institutions

• Financial Trading Markets

What is the correct terminology for money/income that is re-introduced into the circular flow from the 3rd, 4th and 5th sectors of the model

• Leakage

• Drainage

• Injection

• Insertion

What is the correct terminology for money/income that is withdrawn from the circular flow from the 3rd, 4th and 5th sectors of the model

• Leakage

• Drainage

• Injection

• Insertion

Income tax that is paid by consumers to the government is an example of a

• Leakage

• Injection

• Drainage

• Insertion

................ is an example of a ................ It represents money flowing into the economy due to firms wanting to expand their businesses and productive capacity

• Investment, Leakage

• Investment, Injection

• Savings, Leakage

• Savings, Injection

The five-sector circular flow of income shows the connections between the five different sectors of an economy which are

• households, superannuation, foreign debt, GDP and consumers

• households, firms, financial institutions, the government and the banking sectors.

• households, firms, financial institutions, the government and the overseas sectors.

In the two sector circular flow of money model firms use the resources of households to produce goods and services. This is known as

(a)  

In the two-sector circular flow of money model households use their income to buy various goods and services. This is known as

(a)