The Circular Flow of Income Flashcards
1
Q
what is the circular flow of income?
A
a graph depicting the flow of money.
2
Q
what money is taken from households to government?
A
taxes
3
Q
what money is taken from government to a household?
A
transfer payments
4
Q
what money is taken from government to firms?
A
subsidies
5
Q
what money is taken from firms to government?
A
taxes
6
Q
what money goes from households to firms?
A
goods and services
7
Q
what money goes from firms to households?
A
wages
8
Q
what is the name of money that leaves the cycle?
A
a leakage
9
Q
give an example of a leakage.
A
imports
10
Q
what is the name of money that enters the circle?
A
injections
11
Q
give an example of a leakage.
A
exports.
