Circular Flow of Income Diagram

Injections (J) into Circular Flow of Income include Investment, Exports, and (a)   spending.

What are the two principal agentsin the economy in the basic model?

• Government and Banks

• Firms and Households

• Stock Market and Real Estate

• Labor Unions and Nonprofit Organizations

What does the Circular flow of income diagram model?

• Exchange of goods and services

• Flow of money in the economy

• Interaction between households and firms

• Distribution of income and expenditure

What additional components are added to the circular flow of income diagram in the real world?

What are the three different ways that National Income is calculated?

• National Output

• National Income

• National Expenditure

• Gross Domestic Product

What type of economic model is represented in the passage?

• Open economy with government intervention

• Mixed economy with partial government intervention

• Closed economy without any government intervention

• Barter economy with no currency

Withdrawals (W) into Circular Flow of Income include Savings, Imports, and (a)