Podcast
Questions and Answers
In the circular flow of income model, what is the main difference between flows and stocks?
In the circular flow of income model, what is the main difference between flows and stocks?
- Stocks include imports and exports, while flows consist of changes in money supply.
- Flows represent a change in stock variables, while stocks have no flow counterpart. (correct)
- Flows have a definite beginning and ending point, while stocks do not.
- Stocks involve changes in inventories, while flows involve savings and investments.
Which of the following is NOT a real flow in an economy as explained by the circular flow of income model?
Which of the following is NOT a real flow in an economy as explained by the circular flow of income model?
- Flows of factors of production
- Flows of taxes and wages (correct)
- Flows of goods and services
- Flows of money between different sectors
What is the purpose of the circular flow of income model in macroeconomics?
What is the purpose of the circular flow of income model in macroeconomics?
- To study short-term fluctuations in unemployment rates
- To analyze long-run growth in the financial market
- To determine the overall level of income and output in a nation (correct)
- To regulate the interest rates in the country
Which market consists of financial institutions that engage in borrowing and lending money?
Which market consists of financial institutions that engage in borrowing and lending money?
According to the circular flow of income model, what is the main assumption about households' spending behavior?
According to the circular flow of income model, what is the main assumption about households' spending behavior?
What is the significance of the 'real flows' concept in the circular flow of income model?
What is the significance of the 'real flows' concept in the circular flow of income model?
What is the main focus of Macroeconomics?
What is the main focus of Macroeconomics?
Which of the following is a static concept according to the text?
Which of the following is a static concept according to the text?
Who introduced the alternative theory to explain the determination of employment and output?
Who introduced the alternative theory to explain the determination of employment and output?
Which school of thought includes the theories of David Ricardo and J.S. Mill?
Which school of thought includes the theories of David Ricardo and J.S. Mill?
Which concept has a time dimension and is measured over a period of time?
Which concept has a time dimension and is measured over a period of time?
Which theory assigns a critical role to money in the economy?
Which theory assigns a critical role to money in the economy?
