Quiz about circular flow
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The document is a quiz about the circular flow of income model which describes the reciprocal flow of income between producers and consumers. It discusses key aspects of the model including the roles of firms and households, the significance of studying the model, and different approaches to measuring national income such as the output, income, and expenditure approaches.
Quiz about circular flow
- 1. QUIZ ABOUT CIRCULAR FLOW OF INCOME
- 2. • It refers to a simple economic model which describes the reciprocal circulation of income between producers and consumers? ANS: CIRCULAR FLOW OF INCOME
- 3. • Provide consumers with goods and services in exchange for consumer expenditure and "factors of production" from households? ANS: FIRMS
- 4. • Give the four significance of study of circular of income ANS: Measurement of National Income Knowledge of Interdependence Unending Nature of Economic Activities Injections and Leakages Reference
- 5. • It focuses on finding the total output of a nation by directly finding the total value of all goods and services a nation produces? ANS: OUTPUT APPROACH
- 6. • It equates the total output of a nation to the total factor income received by residents or citizens of the nation? ANS: INCOME APPROACH
- 7. • It is basically an output accounting method and it focuses on finding the total output of a nation by finding the total amount of money spent? ANS: EXPENDITURE APPROACH
- 8. • It is often used as a measure of a person's welfare? ANS: GDP PER CAPITA (PER PERSON)