2.1 Circular Flow and GDP

Point B represents

• Product Market

• Factor Market

• Individuals

• Businesses

What are the four main parts of the circular flow diagram?

• Product Market, Stock Market, Factor Market, Fish Market

• Product Market, House Market, Factor Market, Good Market

• Factor Market, Product Market, Households, Firms

• Factor Market, households, Stock Market, super market

What does point A represent on the Circular flow diagram?

• Households

• Businesses

• Factor Market

• Product Market

Where are factors of production (land, labor, etc) exchanged in the circular flow model?

• Factor Market

• Product Market

• Firms

• Individuals

Where do factors of production (land, labor, etc) come from in the circular flow model?

• Factor Market

• Product Market

• Firms

• Individuals

In the circular flow diagram firms pay wages for which factor of production?

• Land

• Labor

• Entrepreneurship

• Raw materials

What does point C represent on the Circular Flow diagram?

• Firm

• Factor Market

• Individual

• Product Market

The exchange of money for goods/services to consumers is represented in which part of the circular flow diagram?

• 1 and 2

• 3 and 4

• 5 and 6

• 7 and 8

A person stocks shelves at a grocery store and receives a wage. They have completed an exchange in which part of the circular flow model?

• Individuals

• Businesss

• Factor Market

• Product Market

Which statement is true about the circular flow diagram?

• A  Households are demanders in the product market and suppliers in the factor market
• A  Business are demanders in the product market and suppliers in the factor market.
• A  Households are demanders in the factor market and suppliers in the product market.
•  A  Businesses and households are not components of the circular flow diagram.