Podcast
Questions and Answers
How does the circular flow of economic activity primarily function?
How does the circular flow of economic activity primarily function?
- By illustrating the interactions between households and firms as resources, goods, and income flow in a circular direction. (correct)
- By restricting the flow of resources between different sectors of the economy.
- By promoting a linear, one-way flow of money from firms to households.
- By isolating firms and households from each other to maximize individual gains.
Which of the following best describes the relationship between households and firms in the circular flow model?
Which of the following best describes the relationship between households and firms in the circular flow model?
- Firms dictate the prices of goods, and households passively accept them.
- Households supply goods and services; firms provide resources.
- Households supply resources, and firms produce goods and services. (correct)
- Households are the primary consumers, while firms are solely responsible for resource extraction.
What is the key distinction between raw materials and intermediate goods in the production process?
What is the key distinction between raw materials and intermediate goods in the production process?
- Raw materials are ready for final consumption, whereas intermediate goods require further processing.
- There is no distinction; the terms are interchangeable.
- Raw materials have undergone significant processing, while intermediate goods are in their natural state.
- Raw materials are unprocessed and extracted from their sources, while intermediate goods have undergone some processing but need more before final use. (correct)
What is the key difference between exports and imports in international trade?
What is the key difference between exports and imports in international trade?
In the context of factor income payments, which of the following correctly matches a resource with its corresponding payment?
In the context of factor income payments, which of the following correctly matches a resource with its corresponding payment?
If a country's GDP growth rate is below the government's target range, what potential implications might arise?
If a country's GDP growth rate is below the government's target range, what potential implications might arise?
Considering the Philippine context, which of the following scenarios would directly contribute to an increase in exports?
Considering the Philippine context, which of the following scenarios would directly contribute to an increase in exports?
What is the likely effect on the circular flow if households drastically reduce their spending and increase their savings?
What is the likely effect on the circular flow if households drastically reduce their spending and increase their savings?
Which of the following correctly matches a factor of production with its corresponding factor income?
Which of the following correctly matches a factor of production with its corresponding factor income?
If a large technology company in the United States buys computer chips manufactured in the Philippines, how would this transaction be classified?
If a large technology company in the United States buys computer chips manufactured in the Philippines, how would this transaction be classified?
How might increased investment in education and job training programs impact the circular flow of economic activity?
How might increased investment in education and job training programs impact the circular flow of economic activity?
In the resource-production payment flow, what is primarily exchanged between households and firms?
In the resource-production payment flow, what is primarily exchanged between households and firms?
Considering the Philippine economy, what might happen if metalliferous ores and metal scrap imports significantly decrease?
Considering the Philippine economy, what might happen if metalliferous ores and metal scrap imports significantly decrease?
If the government aims to widen its economic growth target aiming for a higher GDP growth rate in the coming years, what strategies can it employ?
If the government aims to widen its economic growth target aiming for a higher GDP growth rate in the coming years, what strategies can it employ?
What would cause an increase in business revenues in the circular flow?
What would cause an increase in business revenues in the circular flow?
Flashcards
Circular Flow
Circular Flow
The flow of activities between households and firms in a circular direction.
Firms (Producers)
Firms (Producers)
One part of the circular flow. Economic units that produce goods and services.
Households (Consumers)
Households (Consumers)
One part of the circular flow. Individuals or groups of people living together.
Factor income payments
Factor income payments
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Raw Materials
Raw Materials
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Intermediate Goods
Intermediate Goods
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Export
Export
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Import
Import
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Gross Domestic Product (GDP)
Gross Domestic Product (GDP)
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Study Notes
- Circular flow is the flow of activities of households and firms in a circular direction.
- Among firms, the product flow moves up production stages from raw material to intermediate good to final good.
Raw Materials
- Unprocessed goods like raw minerals, logs, and wheat are extracted from their sources.
- Raw materials do not undergo any process of production.
Intermediate Goods
- Semi-processed goods such as leather, cloth, and steel are not ready for final use.
- They undergo some processing but need additional processing before they can be used.
Export vs. Import
- Export is selling goods and services from the home country to a foreign country.
- Major exports include electronic products, other manufactures, woodcrafts, and furniture.
- Import is buying goods and services and bringing them into one's home country.
- Major imports include metalliferous ores and metal scrap, followed by mineral fuels, lubricants and related material, telecommunication equipment, and electrical equipment.
- The country is ranked 44th globally in total exports.
- The country's main export products are integrated circuits, office machine parts, insulated wire, semiconductor devices, and electrical transformers
- Top export partners with the country are China, the US, Japan, Hong Kong, and Singapore
- The Philippines is ranked 33rd in total imports.
- The Philippines' top import products are integrated circuits, refined petroleum, cars, crude petroleum, and broadcasting equipment.
- China, Japan, South Korea, the US, and Singapore are the Philippines' main import partners.
Gross Domestic Product (GDP)
- The Philippine economy failed to meet the government's 2024 growth target.
- The country's GDP grew 5.2% in the fourth quarter; this was reported by the Philippine Statistics Authority on Thursday, January 30.
- That brought the Philippines' 2024 GDP growth rate to 5.6%, below the government's target range of 6% to 6.5%.
- The main contributors to the fourth quarter 2024 year-on-year growth were:
- Wholesale and retail trade; repair of motor vehicles and motorcycles, 5.5%
- Financial and insurance activities, 8.5%
- Construction, 7.8%
- For the whole year of 2024, the industries that contributed the most to the annual growth were:
- Wholesale and retail trade; repair of motor vehicles and motorcycles, 5.6%
- Financial and insurance activities, 9.0%
- Construction, 10.3%
- In the fourth quarter of 2024, Industry and Services posted year-on-year growths of 4.4% and 6.7%, respectively.
- Agriculture, forestry, and fishing (AFF) sector posted a year-on-year decline of 1.8%.
- For the full year of 2024, Industry and Services posted growths of 5.6% and 6.7%, respectively.
- The AFF sector posted a decline of 1.6% in full-year 2024.
- The government widened its growth target for 2025-2028 to a range of 6.0% to 8.0%.
- The growth target from 6.5% to 7.5% for 2025 and 6.5% to 8.0% in 2026-2028 accounted for evolving global uncertainties.
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