Circular Flow of Income Quiz

What is the circular flow?

• Shows how income, spending and output move around an economy

• Shows how tax, spending and output move around an economy

• Shows how income

  and spending

  move around an economy

• Shows how output move around an economy

Which one is the injections in the circular flow of income?

• Investment

• Tax

• Imports

• Spending

Which one is the leakages in the circular flow of income?

• Exports

• Taxes

• Services

• Investment

What is the a closed economy ?

• an economy that is involved in leakages with other economies

• an economy that is involved injection and leakages with other country

• an economy that is involved in trade with other economies

• an economy that doesn't trade with other economies

Which one is involved in the circular flow of income in an open economy?

• Producers

• Consumers

• Government

• Society

A rise in investment will cause a rise in GDP

• True

• False

When injections > leakages, national income will

• Expand

• Contract

• Neutral

• Stabil

When leakages > injections, national income will

• Expand

• Contract

• Neutral

• Stabil

Which combination of changes would increase GDP?

• Injections decrease, Leakages decrease

• Injections decrease, Leakages increase

• Injections increase, Leakages decrease

• Injections increase Leakages increase

Who buys goods and services in an open economy?

• households

• households and firms

• households, firms and governments

• households, firms the governments and foreigners