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Circular Flow Questions

The document contains a 10 question quiz about the circular flow model. It tests understanding of key concepts like: resources flow counterclockwise in the circular flow diagram; the resource market is where households sell resources to businesses; the product market is where businesses sell goods and services to households; and households spend income in the product market while businesses are buyers and households are sellers in the resource market. The two primary players in the circular flow model are businesses and households.

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JoseMiguelDomingo
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2K views2 pages

Circular Flow Questions

The document contains a 10 question quiz about the circular flow model. It tests understanding of key concepts like: resources flow counterclockwise in the circular flow diagram; the resource market is where households sell resources to businesses; the product market is where businesses sell goods and services to households; and households spend income in the product market while businesses are buyers and households are sellers in the resource market. The two primary players in the circular flow model are businesses and households.

Uploaded by

JoseMiguelDomingo
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Circular Flow Model Quiz

1. In the circular flow diagram:

ans: b

a. money flows counterclockwise.


b. resources flow counterclockwise.
c. goods and services flow clockwise.
d. households are on the selling side of the product market.
2. The resource market is the place where:

ans: c

a. households sell products and businesses buy products.


b. businesses sell resources and households sell products.
c. households sell resources and businesses buy resources (or the services of resources).
d. businesses sell resources and households buy resources (or the services of resources).
3. The product market is the place where:

ans: d

a. households buy products and businesses sell products.


b. businesses sell resources and households sell products.
c. households sell resources and businesses buy resources (or the services of resources).
d. businesses sell resources and households buy resources (or the services of resources).
4. Which of the following would be determined in the product market?
a. an employee's salary.
b. the price of equipment used in a bottling plant.
c. the price of 80 acres of farmland.
d. the price of ice cream.
5. In the circular flow diagram:

ans: a

a. households spend income in the product market.


b. businesses sell resources to households.
c. households receive income through the product market.
d. households produce goods.

ans: d

6. Which of the following is true in the resource market?

Ans: c

a. Businesses sell products to households.


b. Businesses sell resources to households.
c. Businesses are on the buying side while households are on the selling side.
d. Businesses are on the selling side while households are on the buying side.
7. The two primary players in the circular flow model are:

ans: c

a. Businesses and Product Market


b. Product Market and Goods
c. Businesses and Households
d. Households and Resources
8. Businesses give _____ to households through the resource market.

Ans: b

a. Goods
b. Money Income
c. Labor
d. Capital
9. Businesses give _____ to households through the product market.

Ans: a

a. Goods
b. Money Income
c. Labor
d. Capital
10. Households give _____ to businesses through the resource market.
a. Goods
b. Money Income
c. Labor
d. Expenditure

Ans: c

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