SOCSCI 9.QUIZ.003.THE CIRCULAR FLOW OF ECON ACT

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• GE 6
• GE 6

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• SAT

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In the circular flow model, which sector represents individuals or groups of individuals who consume goods and services produced by firms?

• Government sector
• Foreign sector
• Household sector
• Financial sector

What does the multiplier effect explain in economics?

• How prices are determined in markets
• The impact of initial changes in spending on overall economic activity
• The relationship between inflation and unemployment
• How interest rates affect investment decisions

Which of the following is an example of an outflow in the context of economic activities?

• Exporting goods to other countries
• Receiving foreign direct investment
• Importing goods from other countries
• Government spending on infrastructure