1.1.6

Question 1

Three sectors

Answer 1

1. Households
2. Businesses
3. Government

Question 2

Household sector

Answer 2

People responsible for suppling and selling of resources and the subsequent purchasing of goods and services

Question 3

Businesses

Answer 3

Producers and suppliers of goods and services

Question 4

Government

Answer 4

Government authorities who are responsible for taxing to support the economy through purschasing goods and services

Question 5

Flow 1 - the nation’s supply of resources

Answer 5

Households role

Question 6

Flow 2 - the demand for resources and the payment of national income

Answer 6

Businesses are reliant on the household sector’s resources and therefore, pay them income

Question 7

Flow 3 - the nation’s spending on incomes

Answer 7

Governments likewise the household sector support the community using income earned on taxation

Question 8

Flow 4 - the production of final goods and services

Answer 8

Consumers and governments undermine the economic activity of an economy due to business’s altering business’s production

Question 9

Two types of living standards

Answer 9

1. Material
2. Non-material

Question 10

Material

Answer 10

Affected by a person’s income and consumption per year

Question 11

Non-material

Answer 11

Reflects quality of life

Question 12

Material:

Higher economic activity

Answer 12

Strengthen:

because of greater utilisation of resources resulting in a higher level of economic output due to an overall increase in economic activity

Question 13

Material:

lower economic activity

Answer 13

Weaker:

because of an inability to utilise its resources this results in lower economic output presumably due to a recession

Question 14

Non-material:

higher economic activity

Answer 14

Strengthens:

greater level of self-esteem and confidence because of the positive effects resulting from an increase in economic activity include a lower rate in unemployment

Question 15

Non-material:

lower economic activity

Answer 15

Weaker:

reduced wellbeing because of the negative effects of presumably a recession resulting in lower economic activity

Question 16

Economic activity

Answer 16

Describes the three circular flow model in which factors of production yield society’s goods and services in exchange for money

Question 17

Circular flow model

Answer 17

Studies the behaviour and interaction between economic agents and defines their role in the economy, consumers are responsible for providing businesses with resources and purchasing goods and services.