As the name implies, the circular flow of income is a chart like structure which represents the income of a household, a city, or even a whole country. As its name implies, it looks like a circle. Let's test your knowledge on this subject by subjecting you to a few questions about it!
The same direction
Different directions
Parallel directions
Different directions but end up meeting
Three
One
Four
Five
Five sector model
Two sector model
One sector model
Three sector model
When money gets into the chart
When money from the chart is invested
When money from the chart is spent recklessly
When money leaves the chart
Savings and Investments
Borrowing money
Lending money
Not doing anything at all with the money
When a household loses money
When money gets into the chart
When money is used for expenditure
When money from the chart is invested
One
Three
Five
Four
Investments
Savings
Borrowing of money
Lending money
Household sector
Overseas sector
Government sector
International sector
When the leakages surpass the injections
When injections surpass the leakages
When the leakages and injections are same
When there are no leakages nor injections