Flow

What are the four main parts of the circular flow diagram?

• Product Market, Stock Market, Factor Market, Fish Market

• Product Market, House Market, Factor Market, Good Market

• Factor Market, Product Market, Households, Businesses

• Factor Market, households, Stock Market, super market

Which arrows on this diagram would represent the transaction between Joe who rents his office to Homework Inc., a company that provides tutoring services?

• 2,3

• 4,7

• 1,2

• 5,6

Arrows 4 and 7 on this circular flow diagram demonstrate

• prices

• taxes

• goods and services flow

• money flow

The arrows 1 to 2 in this diagram represent which aspect of the economy?

• goods and services flow

• money flow

• taxes

• factors of production

What is being represented by the "green flow lines"

• Flow of Money

• Flow of Goods and Services

• Taxes

• law

Businesses provide government with...

• taxes

• sales

• private goods & services

• interest

Annie owns a large amount of land in the country. Spiffco decides to build a large factory on that property, and pay Annie rent for the use of the land. Annie represents which sector of the Circular Flow Model?

• Households

• Firms

• Product Market

• Goods and Services

In the context of the circular flow model, what role do households primarily play?

• A) Producers of goods and services

• B) Suppliers of factors of production

• C) Regulators of the economy

• D) Consumers of government policies

Which of the following best describes the flow of money in a circular flow model?

• A) Money flows from businesses to households through wages and from households to businesses through consumption.

• B) Money flows from the government to businesses through taxes and from businesses to households through subsidies.

• C) Money flows from households to the government through taxes and from the government to businesses through investments.

• D) Money flows from businesses to the government through taxes and from the government to households through welfare.

In a circular flow diagram, what do firms provide to households in exchange for labor?

• A) Goods and services

• B) Wages and salaries

• C) Taxes and subsidies

• D) Government bonds