6 Questions
What is the circular flow model?
A model that represents the flow of goods and services in an economy
What does the circular flow model show?
The flow of goods, services, money, and resources
Why is the circular flow model important?
It helps explain how prices are determined in an economy
What are the main components of the circular flow model?
The main components of the circular flow model are households, firms, and the government.
How does the circular flow model illustrate the flow of goods and services in the economy?
The circular flow model illustrates the flow of goods and services in the economy by showing how households purchase goods and services from firms, and firms produce and sell goods and services to households.
What is the role of the government in the circular flow model?
The role of the government in the circular flow model is to collect taxes from households and firms, and to provide public goods and services to the economy.
Test your knowledge on the circular flow model and its significance in economics. Answer questions on what the model represents and why it is crucial in understanding the flow of money, goods, and services within an economy.
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