MAC - Topic 1/2 - Circular Flow Of Income and Economic Objectives

Question 1

What do households give to firms?

Answer 1

Expenditure

Question 2

What do firms give to households?

Answer 2

Income

Question 3

Households provide firms with…

Answer 3

Factors Of Production

Question 4

As a result of giving to firms, households recieve…

Answer 4

Income

Question 5

Households spend income on

Answer 5

Goods and Services produced by the firms.

Question 6

What are the 3 injections into the economy?

Answer 6

Exports, Investment and Government Spending

Question 7

What are the 3 withdrawals from the economy?

Answer 7

Imports, Taxes and Savings

Question 8

If Injections > Withdrawals, then there is…

Answer 8

Economic Growth

Question 9

If Withdrawals > Injections, then there is

Answer 9

Contracting Economy

Question 10

What are the three methods of measuring economic growth?

Answer 10

Output Method, Expenditure Method and Income Method

Question 11

What does the output method measure?

Answer 11

Total value of goods and services produced in the economy.

Question 12

What does the income method measure?

Answer 12

All incomes together in the economy.

Question 13

What does the expenditure method measure?

Answer 13

C + I + G + (X-M) - Basically aggregate demand.

Question 14

What answers will you get for each?

Answer 14

The same. They will always be equal.

Question 15

What does TIGERS stand for (Economic Objectives)?

Answer 15

Trade, Inflation, Growth, Employment, Redistributing Income and Stability.

Question 16

Which ones are crucial?

Answer 16

TIGE