The circular flow of income 3.2.2

Question 1

what do households provide firms with?

Answer 1

households provide firms with the factors of production
capital, enterprise, land, labours

Question 2

what do firms provide households with?

Answer 2

firms provide households with goods and services

Question 3

what are injections into the circular flow of income?

Answer 3

-investment
-government spending
-exports

Question 4

what are withdrawals or leakage in the circular flow of income?

Answer 4

-savings
-taxed
-import spending

Question 5

what is investment?

Answer 5

when firms spend on capital goods

Question 6

if injections are greater than leakages is economic growth increasing or decreasing?

Answer 6

economic growth is increasing

Question 6

if injections are less than leakages is economic growth increasing or decreasing?

Answer 6

Economic growth is decreasing

Question 7

if injection equal leakages is the economy growing?

Answer 7

the economy is at economic equilibrium

Question 7

what are GDP methods?

Answer 7

1- output method-final value of all goods and services in a year
2-income methods-add up all factor incomes in a year
3- expenditure method- total expenditure in a year added up
output=income=Expenditure