Circular Flow of Income

What does the circular flow of income represent?

• The movement of money, goods, and services in an economy

• The flow of water in a circular tank

• The cycle of seasons in a year

• The rotation of the Earth around the Sun

Which of the following is NOT a component of Aggregate Demand (AD)?

• Consumption (C)

• Investment (I)

• Government Spending (G)

• Changes in productivity

What does the term (X-M) represent in Aggregate Demand (AD)?

• Exports minus Imports

• Expenditure minus Money

• Extra minus Minimum

• Exchange minus Market

Which of the following is a factor that will shift Aggregate Supply (AS)?

• Changes in the costs of production

• Changes in consumer preferences

• Changes in government policies

• Changes in the weather

What does 'aggregate' mean in aggregate demand?

• The total supply of all goods and services in an economy

• The total demand for all goods and services in an economy at any given price level over a period of time

• The total production of all goods and services in an economy

• The total consumption of all goods and services in an economy

Which of the following is NOT a component of Aggregate Demand (AD)?

• Consumption (C)

• Investment (I)

• Government Spending (G)

• Savings (S)

What does the 'G' in the components of Aggregate Demand (AD) stand for?

• Government Spending

• Gross Domestic Product

• General Expenditure

• Global Trade

Which component of Aggregate Demand (AD) is represented by (X-M)?

• Consumption

• Investment

• Government Spending

• Net Exports

What does the term "Price level" refer to in an economy?

• The total output of goods and services

• The average prices for all goods/services in an economy

• The total number of goods produced

• The average income of households

What does "Real GDP" take into account?

• Only the total output of goods and services

• The average income of households

• Inflation

• The total number of goods produced