Circular Flow of Income Quiz

Which sector is referred to as the Household sector?

• Consumers

• Government

• Businesses

• Financial institutions

What is the Firms sector responsible for?

• Providing economic resources

• Producing goods and services

• Saving money

• Collecting taxes

What do households receive in return for their land, labour, and capital?

• Goods and services

• Wages, rent, interest, and/or profit

• Exports

• Savings

What is an "intermediary?"

• A middle person between two parties

• A passive observer in a negotiation
• A direct connection between two parties
• A final decision maker in a dispute

What role do financial institutions play in the economy?

• Providing welfare payments

• Producing goods and services

• Acting as intermediaries between savers and borrowers

• Collecting taxes

What is considered a leakage from the circular flow of income?

• Saving

• Exports

• Investment

• Government expenditure

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

• Imports

• Saving

• Taxation

• Investment

Which sector receives taxation from in the Circular Flow of Income Model

• Government sector
• Financial sector
• Foreign sector
• Household sector

What is the role of taxation in the circular flow of income?

• Consumption

• Intermediary

• Leakage

• Injection

What does the overseas sector include?

• Only imports

• Only exports

• Trade and investment

• Taxation and government expenditure