The Circular Flow of Income - SS3 Economics Past Questions & Answers - page 1

1

Who supplies resources like labour, land, and capital in the circular flow of income?

A

Businesses

B

The government

 

C

Households

D

Investors

CORRECT OPTION: c
2

What do businesses use to produce goods and services?

A

Money

B

Resources

 

C

Taxes

D

Regulations

CORRECT OPTION: b
3

What do businesses receive in exchange for the goods and services they produce?

A

Resources

 

B

Dividends

C

Wages

D

Money

CORRECT OPTION: d
4

What do businesses do with the revenue they receive from selling goods and services?

A

Invest in their business or pay dividends to their owners

B

Give it to the government

 

C

Spend it all on salaries for employees

D

Keep it in a savings account

CORRECT OPTION: a
5

What does the circular flow of income create in the economy?

A

A stable cycle of income, expenditure, and production

B

A fluctuating cycle of income, expenditure, and production

C

A cycle of debt and bankruptcy

 

D

A cycle of unemployment and poverty

CORRECT OPTION: a
6

What is the circular flow of income?

The circular flow of income is a basic economic concept that explains how money flows through the economy.

 

7

What do households supply to businesses in the circular flow of income?

Households supply resources like labor, land, and capital to businesses in the circular flow of income.

 

8

What is the purpose of the circular flow of income?

The purpose of the circular flow of income is to show how households and businesses interact with each other in the market, and how they exchange goods and services for money, creating a stable economy.

Pages: