Introduction to Economic Models

<p>Interest (C)</p> Signup and view all the answers

<p>To provide factors of production and consume goods and services. (C)</p> Signup and view all the answers

<p>Facilitating the flow of funds between savers and borrowers. (D)</p> Signup and view all the answers

<p>The total market value of all final goods and services produced within a country in a specific period. (B)</p> Signup and view all the answers

<p>Government expenditures exceed government revenues. (B)</p> Signup and view all the answers

<p>The flow of funds from savers to borrowers to facilitate economic activity. (D)</p> Signup and view all the answers

<p>Total spending by households on goods and services. (B)</p> Signup and view all the answers

<p>Mineral deposits and forests (B)</p> Signup and view all the answers

<p>Dissaving (A)</p> Signup and view all the answers

<p>Physical tools and equipment used to produce goods and services (C)</p> Signup and view all the answers

<p>Reduced private investment due to government borrowing from the financial market. (D)</p> Signup and view all the answers

<p>Households provide factors of production and businesses produce and sell goods and services. (D)</p> Signup and view all the answers

<p>Financial capital is money used for investments whereas real capital is physical tools and equipment. (A)</p> Signup and view all the answers

Simplified representations of complex economic processes that help economists analyze and predict economic outcomes.

The main participants in the circular flow model who provide resources and consume goods and services.

The total market value of all final goods and services produced within a country in a specific period.

The spending by households on goods and services produced by businesses.

The resources used by businesses to produce goods and services.

The natural resources used in production, like minerals and forests.

Human effort, both physical and mental, used in production.

Physical tools, equipment, and money invested in production.

The combination of resources like land, labor, capital, and entrepreneurship to create new products or services.

Payments made by businesses to households for using their factors of production.

The payment made for the use of land or property.

Compensation for labor services, including salaries, wages, bonuses, and benefits.

The payment for the use of borrowed money.

The residual income remaining after all costs are paid, representing the reward for risk-taking.

The process of a government collecting money from households and businesses through taxes.

Government spending on public services such as education, healthcare, and infrastructure, as well as transfer payments.