Circular Flow of Income Quiz

What are the four factors of production?

• Tax, government, savings, investment

• Labor, interest, rent, profit

• Capital, enterprise, labor, land

• Goods, services, revenue, expenditure

What are leakages in the circular flow of income?

• Consumer spending, business revenue, financial rewards, product markets

• Investment, government expenditure, export revenue

• Savings, taxation, import expenditure

• Wages, interest, rent, profit

What is the difference between product markets and resource markets?

• Product markets are where taxes are collected, while resource markets are where government spending occurs

• Product markets are where imports are purchased, while resource markets are where exports are sold

• Product markets are where businesses purchase factors of production, while resource markets are where goods and services are purchased

• Product markets are where goods and services are purchased, while resource markets are where businesses purchase factors of production

What is the main difference between an open and closed economy?

• An open economy does not trade with the rest of the world, while a closed economy is open to international trade

• An open economy has no savings, while a closed economy includes investment

• An open economy is open to international trade, while a closed economy does not trade with the rest of the world

• An open economy has no government, while a closed economy includes government spending

What is the circular flow model for a two-sector closed economy?

• Households, firms, and government

• Households and firms

• Households, firms, and banks

• Households, firms, and international trade

What is considered an injection in the circular flow of income?

• Wages, interest, rent, profit

• Investment, government expenditure, export revenue

• Consumer spending, business revenue, financial rewards, product markets

• Savings, taxation, import expenditure

What is the three-sector economy model?

• Households, firms, and government

• Households and firms

• Households, firms, and banks

• Households, firms, and international trade

What is the four-sector open economy model?

• Households and firms

• Households, firms, and banks

• Households, firms, and government

• Households, firms, and international trade