1.
According to the Circular Flow Model, there are how many sectors and markets within the economy?
Correct Answer
D. 2 sectors: 3 markets
Explanation
According to the Circular Flow Model, the economy is divided into two sectors: the household sector and the business sector. The household sector includes individuals and families who supply resources such as labor and capital, while the business sector includes firms that produce goods and services. Additionally, there are three markets within the economy: the product market, where goods and services are bought and sold, the resource market, where resources are bought and sold, and the financial market, where financial assets are bought and sold. Therefore, the correct answer is 2 sectors: 3 markets.
2.
What are the names of the two Sectors according to the circular flow of the economy?
Correct Answer
C. Business, Household
Explanation
In the circular flow of the economy, the two sectors are referred to as Business and Household. The Business sector includes all the firms and organizations that produce goods and services, while the Household sector represents individuals and families who consume those goods and services. These two sectors interact in a continuous flow of money, resources, and products, with businesses providing income and employment opportunities to households, and households providing the demand for goods and services produced by businesses.
3.
Name the Three Markets within the economy?
Correct Answer
B. Product, Product Resource, Financial
Explanation
The correct answer is "Product, Product Resource, Financial." In an economy, there are three main markets. The product market is where goods and services are bought and sold by households and businesses. The product resource market is where resources such as labor, land, and capital are bought and sold. The financial market is where financial assets such as stocks and bonds are traded. These three markets are interconnected and play a crucial role in the functioning of the economy.
4.
What is the function of the Financial Market?
Correct Answer
A. Exchange the commodity known as legal claims
Explanation
The function of the financial market is to exchange the commodity known as legal claims. This refers to the buying and selling of financial instruments such as stocks, bonds, and derivatives, which represent ownership or claims on assets. The financial market provides a platform for investors to trade these legal claims, facilitating the flow of capital and allowing individuals and businesses to raise funds and manage risks.
5.
What are the foremost examples of a Product Resource's factors of production?
Correct Answer
B. Labor, Land, Capital, Entrepeneurship
Explanation
The foremost examples of a Product Resource's factors of production are labor, land, capital, and entrepreneurship. Labor refers to the physical and mental efforts of individuals involved in the production process. Land includes natural resources such as water, minerals, and forests. Capital represents the machinery, equipment, and tools used in production. Entrepreneurship involves the organization and management of resources to create and operate a business.
6.
What is the function of the Product Market?
Correct Answer
A. Provide the combination of all goods and services
Explanation
The function of the Product Market is to provide the combination of all goods and services. This means that the Product Market is the place where consumers can purchase a wide range of products and services that are available in the economy. It is the marketplace where the supply and demand for goods and services meet, allowing for the exchange of these products between producers and consumers.
7.
What is an example of the Business sector of the economy?
Correct Answer
A. Corporations
Explanation
Corporations are an example of the business sector of the economy because they are large companies that are owned by shareholders and operate for profit. They play a significant role in the economy by producing goods and services, creating jobs, and generating revenue. Corporations have a separate legal entity from their owners, which allows them to enter into contracts, own assets, and be held liable for their actions. They contribute to economic growth and development by driving innovation, competition, and investment.
8.
The mass of people who invest revenue within the economy are known as?
Correct Answer
C. Consumers
Explanation
Consumers are the correct answer because they are the individuals or households that purchase goods and services in the economy. They play a crucial role in driving economic growth by spending their income on various products and services, which in turn stimulates production and creates demand for jobs. Consumer spending is a key component of the overall economy and is often used as an indicator of economic health. Therefore, the mass of people who invest revenue within the economy are known as consumers.
9.
The image design for which the three markets are expressed is called what?
Correct Answer
C. Circular Flow Model
Explanation
The correct answer is Circular Flow Model. This model represents the flow of goods, services, and money between households and firms in an economy. It shows how households provide resources to firms in exchange for income, and how firms produce goods and services that are then purchased by households. This circular flow of economic activity is essential for understanding how an economy functions.
10.
Bonus - Fill in the blank: ______ are household sector income that is diverted to the government sector.
Correct Answer
A. Taxes
Explanation
Taxes are household sector income that is diverted to the government sector. Taxes are a mandatory payment imposed by the government on individuals and businesses to fund public services and programs. They are collected to finance infrastructure development, healthcare, education, defense, and other essential services provided by the government.