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Questions and Answers

Which two sectors are primarily considered in the two-sector model of the economy?

  • a. Household and Business (correct)
  • b. Agriculture and Industry
  • c. Primary and Tertiary
  • d. Goods and Services

    • In the two-sector model, what does the term "Household Sector" refer to?

  • Individuals and families (correct)
  • Business and corporations
  • Government entities
  • Non-profit organizations

    • What is the main economic transaction between the Household Sector and the Business Sector in the two-sector model?

  • Goods and services exchange (correct)
  • Taxation and government spending
  • Investment and savings
  • Import and export

    • Which of the following is a characteristic of the two-sector model?

    <p>It focuses on the production and consumption of goods and services.</p> Signup and view all the answers

    In the context of the two-sector model, what is the primary function of the Business Sector?

    <p>Production of goods and services</p> Signup and view all the answers

    Which economic concept is represented by the flow of money from households to businesses for the purchase of goods and services in the two-sector model?

    <p>Consumption</p> Signup and view all the answers

    In the two-sector model, what is the primary source of income for the Household Sector?

    <p>Wages and salaries</p> Signup and view all the answers

    In the two-sector model, what represents the leakage from the circular flow of income?

    <p>Savings</p> Signup and view all the answers

    Which of the following is a limitation of the two-sector model?

    <p>It oversimplifies economic interactions.</p> Signup and view all the answers

    “Real flow” refers to the flow of

    <p>Both A and C</p> Signup and view all the answers

    Real flow is also called

    <p>Physical flow</p> Signup and view all the answers

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