Circular Flow Of Income

Question 1

The factors of production

Answer 1

• land
• labour
• capital
• enterprise, entrepreneurship

                                 CELL

Question 2

Withdrawals / leakages within the circular flow of income

Answer 2

Money flows out of the circular flow through:
- Savings
- Imports
- Taxes

                                  SIT

Question 3

Injections within the circular flow of income

Answer 3

• Government spending
• Exports
• Investment (banks)

Question 4

When withdrawals are greater than injections an economy will…

Answer 4

Shrink - because money is leaving the circular flow of income

Question 5

When injections are greater than withdrawals an economy will…

Answer 5

Grow - money is entering the circular flow of income