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Circular Flow Model Vocab Review
By Tarik Davis
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Last updated 6 months ago
10 questions
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Question 1
1.
What two roles do households play in the Circular Flow Model?
Suppliers in the resource market
Producers of goods and services
Consumers in the product market
Owners of businesses
Question 2
2.
In the Circular Flow Model, businesses provide which two items to households?
Goods and services
Income
Resources and factors of production
Expenditures
Question 3
3.
Which two components are part of the money flow in the Circular Flow Model?
Rent paid by firms
Revenue received by businesses
Goods sold to consumers
Wages paid to households
Question 4
4.
What two transactions occur in the resource market?
Businesses buy goods from households
Households sell labor to businesses
Businesses pay wages to households
Households request services from firms
Question 5
5.
Which two of these are factors of production?
Labor
Goods
Capital
Money
Question 6
6.
Which two elements describe real flow in the Circular Flow Model?
Money flows from consumers to firms
Income flows from businesses to households
Resources move from households to businesses
Goods move from businesses to households
Question 7
7.
In the product market, households do what two activities?
Supply money for expenditures
Provide resources for production
Purchase goods and services
Sell products to businesses
Question 8
8.
What two things do businesses aim to achieve in the Circular Flow Model?
Produce goods and services
Generate revenue
Limit expenditures
Reduce household income
Question 9
9.
Which two actions are taken by households regarding income?
Create goods
Invest in businesses
Make expenditures
Receive wages
Question 10
10.
In the Circular Flow Model, what flows from households to businesses?
Profit
Expenditures
Resources
Goods and services