Macroeconomic Circular Flow Model and Economic Interactions Quiz

Households play a key role in the economy by consuming goods and services.

The flow of goods and services in the circular flow model is represented by the product flow.

The business sector in the circular flow model includes firms engaged in the production of goods and services.

Businesses paying households for resources represents factor payments in the circular flow model.

If leakages exceed injections, national income in the circular flow model decreases.

Investments are not considered leakages in the circular flow model.

A balanced state where leakages equal injections is represented as economic equilibrium in the circular flow model.

Spending on imported goods by households is considered a leakage in the circular flow model.

Government purchases of goods and services are considered injections in the circular flow model.

The equality between total injections and total leakages is a key balance in the circular flow model.

Household savings represent a withdrawal from the circular flow model.

A decrease in consumer confidence leads to a decrease in injections in the circular flow model.

An increase in government spending leads to an increase in injections in the circular flow model.

Imports are not considered injections in the circular flow model.