Circular Flow and Multiplier

Circular Flow and Multiplier

12th Grade

12 Qs

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Circular Flow and Multiplier

Circular Flow and Multiplier

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Quiz

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12th Grade

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Created by

Lydia Coveney

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12 questions

Show all answers

1.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is the circular flow of income?

The circular flow of income is a model that shows the flow of goods and services within a single firm

The circular flow of income is a model that shows the flow of goods and services between producers and consumers

The circular flow of income is a model that shows the flow of goods and services between countries

The circular flow of income is a model that shows the flow of goods, services, and money between households and firms in an economy.

2.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Name the leakages in the circular flow of income.

The balance of income within the economy and income available for spending.

Savings, taxes, and imports.

Government spending, exports, and investments.

Savings, taxes, and exports.

3.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

How does government intervention affect the circular flow of income?

Government intervention has no impact on the circular flow of income

Government intervention always leads to an increase in the circular flow of income

Government intervention only affects the production sector of the circular flow of income

Government intervention can either increase or decrease the flow of income within the circular flow, depending on the specific policies implemented.

4.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Define the multiplier effect in economics.

The multiplier effect in economics is the phenomenon where an initial decrease in spending leads to a larger increase in national income and economic growth.

The multiplier effect in economics is the process of reducing the national income and economic growth.

The multiplier effect in economics refers to the phenomenon where an initial increase in spending leads to a larger increase in national income and economic growth.

The multiplier effect in economics is the process of stabilizing the national income and economic growth.

5.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is the formula for calculating the multiplier?

Multiplier = 1 + MPC

Multiplier = 1 / (1 - MPC)

Multiplier = 1 - MPC

Multiplier = MPC / (1 - MPC)

6.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Explain the concept of marginal propensity to consume (MPC) in relation to the multiplier.

The marginal propensity to consume (MPC) is related to the multiplier through the formula: Multiplier = 1 / (1 - MPC)

The multiplier is inversely proportional to the marginal propensity to consume (MPC)

The multiplier is equal to the marginal propensity to consume (MPC)

The marginal propensity to consume (MPC) has no impact on the multiplier

7.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Discuss the relationship between the multiplier and the level of consumption in an economy.

The multiplier and the level of consumption in an economy are negatively related.

The multiplier and the level of consumption in an economy are positively related.

The level of consumption in an economy is determined solely by government spending.

The multiplier has no impact on the level of consumption in an economy.

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