Page 71 - Macroeconomics. book docx_Neat
P. 71
12. Saving reduces: A) Spending B) Income flow C) Inflation D) Employment
13. The circular flow shows the economy as:
A) Separate units B) Isolated parts C) A connected system D) A closed system
14. Investment is an example of: A) Leakage B) Tax C) Injection D) Saving
15. Public services are mainly provided by:
A) Firms B) Households C) Government D) Foreign sector
True or False
The circular flow model explains how money moves between households and firms.
(True)
Households provide labor to firms in exchange for wages. (True)
Firms do not play any role in the circular flow of income. (False)
Government affects the circular flow through taxes and government spending. (True)
In the circular flow model, households only consume and do not earn income. (False)
71
