Paige and Bella 3/11/25

What do households own in the circular flow of the economy?

• Products and services

• Resources used in production

• Government tax revenue

• Business profits

In which direction does money flow in the circular flow diagram?

• The same direction as goods and services

• In multiple random directions

• Opposite to goods and services

• In a vertical direction only

How do businesses use their profits in the circular flow model?

• To pay government taxes only

• To purchase more resources

• To give back to households

• To store in banks

What is the primary role of households in the circular flow model?

• To produce goods and services

• To collect tax revenue

• To sell resources and purchase products

• To manage business operations

What do businesses do with the resources they buy?

• Save them for future use

• Sell them to other businesses only

• Trade them with the government

• Make products to sell

How does the government participate in the circular flow?

• By creating all products and services

• By owning all resources

• By using tax revenue to provide public services

• By controlling all business operations

What happens when households spend money in this economic model?

• The money disappears from the economy

• The money is used to purchase more goods and services

• The government collects all of it

• Businesses shut down

Where does the government get its funding in the circular flow model?

• Only from household taxes

• Only from business taxes

• From both household and business taxes

• From international trade

What is one of the main functions of businesses in this model?

• To provide public services

• To collect taxes

• To sell products to households, other businesses, and government

• To regulate the economy

What do households do with the income they receive from selling resources?

• Save all of it

• Give it to the government

• Purchase products

• Invest in new businesses