Circular Flow Sahastrabuddhe

What are the two main sectors in the economy?

• Service sector and Agricultural sector

• Tertiary sector and Quaternary sector

• Manufacturing sector and Retail sector

• Primary sector and Secondary sector

Who is the basic consuming unit in the economy?

• Household

• Non-profit organization

• Corporation

• Government

What is the main function of a household?

• To act as a place for social gatherings.

• To serve as a storage space for items.

• To provide entertainment and leisure activities.

• To provide shelter and meet basic needs.

What does a business firm primarily do?

• A business firm exclusively conducts research and development.

• A business firm primarily donates to charity.

• A business firm mainly focuses on employee training.

• A business firm primarily produces and sells goods or services.

What do households supply to business firms?

• Raw materials and equipment

• Labor, capital, and consumer demand

• Financial loans and investments

• Marketing strategies and advertising

What is the flow of income from business to household called?

• Factor payments

• Income redistribution

• Household revenue

• Business profits

What are some examples of factor services?

• credit card processing services

• business consulting services

• Examples of factor services include invoice factoring, accounts receivable financing, and purchase order financing.

• inventory management services

What do households use their income for?

• Spending on entertainment and vacations

• Investing in luxury items

• Donating all income to charity

• Households use their income for essential expenses like housing, food, transportation, healthcare, education, and savings.

What is the flow of money from households to businesses called?

• Consumption expenditure

• Government spending

• Business revenue

• Investment income

What do business firms supply to households?

• Financial advice

• Goods and services

• Real estate properties

• Raw materials