11 Circular Flow of Economics

Question 1

shows relationship between income and expenditures

Answer 1

circular flow diagrams

Question 2

transactions (exchange) among different sectors of the economy

Answer 2

circular flow diagrams

Question 3

spending by households for goods and services

Answer 3

consumption spending

Question 4

market value of everything in the market

Answer 4

GDP

Question 5

market value of all final goods and services in the economy

Answer 5

GDP

Question 6

consumption spending + investment spending

Answer 6

GDP (savings, investment, and financial market)

Question 7

spending time by firms on capital goods

Answer 7

investment spending

Question 8

consumption spending + investment spending + government spending

Answer 8

GDP (circular flow model with government sector)

Question 9

all spending of the gov’t

Answer 9

government spending

Question 10

utilities, pay roll (salaries)

Answer 10

consumption expenditure

Question 11

public infrastructure (roads, public schools, public transportation, etc)

Answer 11

public investment

Question 12

social purpose (subsidies, scholarships, financial aid, relief aid, etc)

Answer 12

gov’t transfers

Question 13

G

Answer 13

gov’t spending

Question 14

Y

Answer 14

income

Question 15

C

Answer 15

consumption

Question 16

E

Answer 16

GDP

Question 17

S

Answer 17

savings

Question 18

I

Answer 18

investment

Question 19

T

Answer 19

taxes