Topic 2 Additional Notes

Question 1

Dependant Vbl

Answer 1

VARIABLE THAT IS BEING EXPLAINED

Question 2

Independant VBL

Answer 2

variable that explains something

X

Question 3

new cf diagram players
5 boxes

Answer 3

firms
product markets
households
factor markets
government

Question 4

2 links between households and firms

Answer 4

households provide factors of production to FACTOR MARKETS

Factor market provides fop to firms

Firms provide goods and services to product market

product market provide goods to housheolds

households provide product market with spending

product market provide revenue to firms

firms provide wages to factor markets

factor market provide incomet o households

Question 5

how are governments connected to households and firms (4 ways)

Answer 5

Households AND firms give taxes to govt

Govt gives subsidies to firms
Govt gives interest payments and wages to households!

Question 6

THE MOST COMPLETE CCF LOOKS LIKE…

Answer 6

Rest of the world

firms govt households

-houses pay rest of world for goods (imports)
-rest of world pays domestic firms bc fomestic firms provide EXPORTS

-houses pay domestic firms for g/s
-firms pay househlds wages and rent and interest
-households pay govt taxes
=household recieve interest from govt

-govt pay domestiv firms for g/s
-govt also gives firms subsideis
-govt recieves taxes

-households save by outting money in financial system
-firms borrow money from banks