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WorksheetsThe Markets and Circular Flow
Total questions: 21
Worksheet time: 11mins
This type of market buys and sells goods and services
Financial Market
Labour Market
Retail Market
Overseas Market
An example of a retail market includes:
The Australian Stock Exchange (ASX)
Seek.com
Westfield Chermside
Banks
In the labour market
Employees (Households) sell their skills/effort, Employers (businesses) pay wages/salaries
Businesses (Employees) sell their skills, Employers (Household) buy goods and services.
Businesses become the sellers and Households become the buyers
Government sell their skills, Households buy their efforts
The following are examples of the retail market:
Governments, Overseas, Financial
Online shops, job search websites, ASX
Online shopping, physical shops, market stalls
Command, Mixed, Market
Who is involved in the financial markets?
Banks
Government
Retail
Oveseas
In a financial market
Banks act as buyers when a borrower needs a loan
Banks act as buyers when a saver (the seller) lends money to the bank
Banks act as sellers when a saver lends money to the bank
What is bought and sold on the stock market?
Money
Goods and Services
Shares in companies
Labour
The circular flow model shows:
Goods and Services bought and sold in the Economy
Sectors of the Economy and how money circulates
How Households buy items on the different markets
The type of Economic System Australia is in
In the circular flow model, Households and Businesses rely on each other for:
Labour for Income and Goods and Services for payment
Savings and Investments
Taxation and Government Spending
Labour
What does the government sector do?
Buys goods and services
Households and firms rely on one another
Turns savings from households into investment loans to businesses
Taxes households and businesses, but also returns money to them through government spending
What does the financial sector do?
Turns savings from households into investment loans to businesses
Taxes households and businesses, but also returns money to them through government spending
Sells goods and services in exchange for spending
Buys goods and services oversease
In the circular flow model, what is a leakage?
Outflow of expenditure into the circular flow of income model
Inflow of income into the circular flow of income model
When leakages are equal to injections in the economy
Organisations that link savers with borrowers
In the circular flow model, an example of leakages include:
Savings, Taxation, Imports
Investment, Government Spending, Exports
Savings, Investments, Labour
Government Spending, Taxation, Imports
In the circular flow model, and example of injections include:
Taxation, Savings, Imports
Goods and Services
Government spending, Exports, Investments
Labour, Wages, Salaries
In the circular flow model, if leakages are more than injections the economy will
Expand (get bigger) - more money circulating
Contract (get smaller) - less money circulating
Be in the state of equilibrium
In the circular flow model, if injections are greater than leakages
Contract (get smaller) - less money circulating
Be in the State of Equilibrium
Expand (get bigger) - more money circulating
What would happen if households decided to save more of their income?
increase sale of goods and services, more money for businesses
more taxation for the government
decrease sale of goods and services, less money for business
increase in imports
What would happen if governments increase the level of welfare/centrelink payments?
Business will sell more goods and services
Business will sell less goods and services
More savings will happen
More exporting of goods
What would happen if there is a big increase in the availability of cheaper imported goods?
Households would receive more money to spend
More jobs in Australia which would mean more money
More savings
More money going overseas, Australian businesses selling less goods and services
The Household Sector is made up of:
the total of all producers in the economy
the total of all consumers in the economy
banks and other financial intermediaries
local, state and federal government
What are three main economic questions for every economy to ask?
What are the needs? What are the wants? What can we do?
Who is the consumer? Who is the producer? Who is the buyer?
What to Produce? What to Exchange? Where to Buy?
What to produce and how much? How to produce? For whom to produce?
