Circular Flow Model Quiz

What is the model called that describes the interactions in a market economy?

• Linear Flow

• Circular Flow

• Square Flow

• Triangular Flow

In the circular flow model, who are the two main decision makers?

• Governments and Banks

• Schools and Hospitals

• Households/Individuals and Businesses

• Farmers and Factories

What does the circular flow model help visualize?

• The way goods are stored

• The way money moves in a market economy

• The way people travel

• The way animals migrate

What are the two markets within the circular flow model?

• Market for Food and Market for Clothes

• Market for Resources and Market for Goods and Services

• Market for Cars and Market for Bikes

• Market for Books and Market for Toys

In the market for resources, who are the sellers?

• Businesses

• Schools

• Households

• Banks

In the market for goods and services, who are the buyers?

• Businesses

• Households

• Governments

• Factories

What does the inner loop of the circular flow model represent?

• The flow of money

• The flow of goods and services

• The flow of water

• The flow of air

What does the outer loop of the circular flow model represent?

• The way businesses store goods

• The way households spend money

• The way schools teach

• The way factories produce

What do businesses use the money gained from households for?

• To buy more land

• To produce more and pay wages

• To build more schools

• To travel

What do households provide to businesses in the market for resources?

• Money

• Resources

• Food

• Clothes