If markets for Goods & Servs were the only markets available, what would happen to the economy?

Households would have all the products, Firms would eventually have all the money, The economy would stop entirely

What are “factors of production”?

Anything used by a firm to make a final product

Which way does money flow in the circular flow model?

It depends on the interpretation of the model

And finally... what is the circular flow model?

A diagram used to represent monetary transactions in economy

What are the simplified names of the two markets?

The resource market and product market

Where buyers and sellers go to generate economic activity

What are the 2 simplified factors of the product market?

Businesses sell, households buy

What are the 2 simplified factors of the resource market?

Households sell, businesses buy

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Whitwam - Basic Circular Flow Models 13

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A Macro Economics quiz to introduce the basics of circular flow models. For Mr. Whitwam's Second Period AP Macro Econ Final.

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Questions 15

Answers

1
If markets for Goods & Servs were the only markets available, what would happen to the economy?
The economy would remain unchanged
Households would have all the products
Firms would eventually have all the money
The economy would stop entirely
2
What are “factors of production”?
Land, labor, capital, and goods
Anything used by a firm to make a final product
Labor and Capital
Labor, capital, and entrepeneurship
3
What are the two primary actors in the economy, as outlined by the circular flow model?
Goods and Service Markets and Factor Markets
Households and Firms
Factor Markets and Firms
Goods Markets and Service Markets
4
Which way does money flow in the circular flow model?
It doesn't
Clockwise
Counter clockwise
It depends on the interpretation of the model
5
What is capital??
The common name given to the gov. for economic purposes
Machines used to make products
Products typically made by children
A type of labor provided by elite workers
6
Firms...
Buy products, sell products
Buy resources, sell resources
Buy resources, sell products
Buy products, sell resources
7
And finally... what is the circular flow model?
A diagram used to represent monetary transactions in economy
Shows how firms and businesses communicate in an economy
A diagram showing how capital functions in the economy
Shows the flow of products in an economy
8
Households...
Sell resources, buy products
Sell products, buy products
None of the above
Sell products, buy resources
9
What are the simplified names of the two markets?
The goods market and services market
The resource market and product market
The capital market and consumer market
The labor market and land maret
10
What is a market?
Where buyers and sellers go to generate economic activity
Where different firms meet to generate economic activity
Where households create goods to generate economic activity
None of the above
11
What do households provide to firms?
Labor, capital, and TLC
Money
Labor
Land, labor, capital, etc
12
What are the 2 simplified factors of the product market?
Firms buy, businesses sell
Households buy, firms buy
Businesses sell, households buy
Households sell, firms buy
13
What form of economy does the traditional circular flow model represent?
Socialism
A purely communistic economy
Fascism
A purely capitalistic economy
14
What are the 2 simplified factors of the resource market?
Businesses sell, firms buy
Households buy, firms sell
Households buy, businesses sell
Households sell, businesses buy
15
What do firms provide to households?? (Choose the BEST answer)
Land
Labor and services
Money
Compensation

Whitwam - Basic Circular Flow Models 13 Flashcards | StudBud