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Circular Flow Model
Circular Flow Model
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Circular Flow Model questions for AP Macroeconomics
Flashcards
14 cards
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Questions
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Answers
1
Rent is paid by ________ to __________.
product markets to households
product markets to firms
households to factor markets
firms to resource markets
2
An arrangement that brings buyers and sellers together to do business is:
free enterprise
capitalism
a household
a market
3
Which one is NOT an example of an 'injection'?
Imports
Taxes
Investment
Government Spending
4
If there is more money leaving the economy that entering the economy, what is going to happen?
Grow
Expand
Decline
Remain the same
5
Identify number 2 in the model
factor market
product market
firms
households
6
Borrowing and lending between nations is known as:
international finance
global marketing
the global economy
international trade
7
Identify number 3 in the model:
product market
households
firms
factor market
8
If injections are greater than leakages what will happen to the economy?
Crash - leading to recession
Nothing - the economy will remain the same
Expand and experience economic growth
Decrease and experience economic decline
9
Select the option that defines the term 'leakage'
Influencing trade through imports and exports
Putting money back into the economy
Reducing the flow of income in the economy
Bringing resources together
10
What are economic resources?
Imports and exports
Leakages and injections
Households and firms
Land, labour, capital and entrepreneurship
11
Which one of these is NOT an example of expanding economic activity?
Increase in investment
Increase in taxes
Increase in exports
Increase in government spending
12
In exchange for final goods and services Firms receive __________ from Product Markets.
revenue
consumption
income
costs
13
Land, labor, capital, and entrepreneurship are bought and sold in:
firms
product markets
households
factor markets
14
In exchange for Public Goods and Services, Households pay:
income
revenue
expenditures
taxes