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Circular Flow of Income Quiz

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1. In the circular flow of income, which entities make up the two main sectors?

2. Which economic market best describes where households become income recipients?

3. What is the main aim of the circular flow of income model in economics?

4. In the circular flow of income model, what do households provide to firms?

5. How are businesses compensated in the product market as per the circular flow of income model?

6. Where do firms get the financial means to pay for the factors of production in the circular flow of income model?

7. In the circular flow of income model, how does money flow back to households from the factor market?

8. What does the outer flow in the circular flow diagram represent?

9. What does the concept of 'leakages' in the circular flow of income model refer to?

10. Which of the following best describes the concept of 'injections' in the circular flow of income model?