Reviewing our Knowledge of the Circular Flow of Income

The five sectors of the economy in the circular flow of income are...

• business, financial injections, labour, imports

• household, goods services, banks, business

• business, consumption, exports, financial, government

• household, business, financial, government, overseas

Apply your understanding of the circular flow of income model to identify the money flow which best describes the following transaction:

A shop assistant collects her weekly wage

• Income

• Economic resources

• Consumption/Expenditure

• Output/Goods and Services

Apply your understanding of the circular flow of income model to identify the money flow which best describes the following transaction:

A plastics firm installs a new moulding machine.

• Income

• Economic resources

• Consumption/Expenditure

• Output/Goods and Services

Apply your understanding of the circular flow of income model to identify the money flow which best describes the following transaction:

Fans buy meat pies at a football match.

• Income

• Economic resources

• Consumption/Expenditure

• Output/Goods and Services

Apply your understanding of the circular flow of income model to identify the money flow which best describes the following transaction:

Australian wheat growers sell grain to China.

• Savings

• Imports

• Exports

• Government Spending

Apply your understanding of the circular flow of income model to identify the money flow which best describes the following transaction:

A car enthusiast buys a vintage Rolls Royce from overseas.

• Imports

• Exports

• Investments

• Government Spending

Apply your understanding of the circular flow of income model to identify the money flow which best describes the following transaction:

An 80 year old woman collects her pension cheque (from the government).

• Imports

• Exports

• Investments

• Government Spending

Is the transaction below an injection or leakage of income from the Australian economy?

An individual decides to reduce their spending and save more of their income.

• Injection

• Leakage

Is the transaction below an injection or leakage of income from the Australian economy?

The state government has received tax revenue but has not yet decided what to spend the money on.

• Injection

• Leakage

Is the transaction below an injection or leakage of income from the Australian economy?

A business decides to borrow money from a bank to invest in new equipment that will increase its output.

• Injection

• Leakage