What Do You Know About Circular Flow Of Income?
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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!
- 1.The flows of money and services run in….
- A.
The same direction
- B.
Different directions
- C.
Parallel directions
- D.
Different directions but end up meeting
- 2.How many models of a circular flow income chart exist?
- A.
Three
- B.
One
- C.
Four
- D.
Five
- 3.What is the name of the last model?
- A.
Five sector model
- B.
Two sector model
- C.
One sector model
- D.
Three sector model
- 4.What is a leakage in a circular flow of income chart?
- A.
When money gets into the chart
- B.
When money from the chart is invested
- C.
When money from the chart is spent recklessly
- D.
When money leaves the chart
- 5.What constitute leakages?
- A.
Savings and Investments
- B.
Borrowing money
- C.
Lending money
- D.
Not doing anything at all with the money
- 6.What is an injection in a circular flow of income chart?
- A.
When a household loses money
- B.
When money gets into the chart
- C.
When money is used for expenditure
- D.
When money from the chart is invested
- 7.How many sectors exist in the circular flow of income chart?
- A.
One
- B.
Three
- C.
Five
- D.
Four
- 8.What constitute injections?
- A.
Investments
- B.
Savings
- C.
Borrowing of money
- D.
Lending money
- 9.All of these except one are part of the circular flow of income chart.
- A.
Household sector
- B.
Overseas sector
- C.
Government sector
- D.
International sector
- 10.When is a state of equilibrium reached?
- A.
When the leakages surpass the injections
- B.
When injections surpass the leakages
- C.
When the leakages and injections are same
- D.
When there are no leakages nor injections
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