Circular Flow of Income (AQA A-Level Economics): Quizzes
📚Quizzes
Practise the questions
10 questions from this quiz
ShowHide
Practise the questions
10 questions from this quiz
What fundamental relationship exists between the three measures of national income?
What fundamental relationship exists between the three measures of national income?
They always produce equal totals
Why is real national income better than nominal for comparing economic performance over time?
Why is real national income better than nominal for comparing economic performance over time?
It removes the effects of price changes
What does a closed economy in the two-sector circular flow model exclude?
What does a closed economy in the two-sector circular flow model exclude?
Government sector and international trade
What is saving in the circular flow model?
What is saving in the circular flow model?
Income households choose not to spend
How does equilibrium national income relate to full employment income?
How does equilibrium national income relate to full employment income?
They are not necessarily the same
What is the equilibrium condition in the simple two-sector model?
What is the equilibrium condition in the simple two-sector model?
In an open economy, what are imports classified as?
In an open economy, what are imports classified as?
A withdrawal from the circular flow
What is the equilibrium condition in the full circular flow model?
What is the equilibrium condition in the full circular flow model?
According to Keynes, what causes recessions?
According to Keynes, what causes recessions?
Deficient aggregate demand
What is a key purpose of economic models?
What is a key purpose of economic models?
To understand and predict economic behaviour