Circular Flow

Question 1

5 sector circular flow

Answer 1

check notes

Question 2

Name the five sectors that comprise the Australian economy

Answer 2

household, firms, finance, government and foreign

Question 3

Leakage

Answer 3

Is when money goes out of the economy e.g imports

Question 4

Injection

Answer 4

Is when money goes into the economy e.g government taxes

Question 5

If leakages are greater than injections, suggest the effect that this will have on the economy. What steps could the government take to avoid this.

Answer 5

A recession will occur- the government can lower taxes and spending and increase the foreign exports.

Question 6

Role of Government

Answer 6

To tax the people and use this taxation on expenditure in public projects.

Question 7

Role of Overseas Sector

Answer 7

To import products to Australia and accept exports from Australia.

Question 8

Role of Consumers

Answer 8

Buys good and services, pay wages and taxes, borrow money and import and export goods and services.

Question 9

Role of Producers

Answer 9

Makes goods and services, pay wages and taxes, borrow money and import and export goods and services.

Question 10

Role of Government

Answer 10

Change Taxes, pay wages,spend on goods and services, provide benefits and borrow money.

Question 11

Role of Financial Institutions

Answer 11

Hold savings, lend money, aim to make a profit and pay taxes.