Circular Flow Diagram

Q.

Why is the flow of income and product called 'circular flow'?

Q.

Flow of goods and services across different sectors of the economy is called :

1. Circular Flow

2. Monetary Flow

3. Inventory Flow

4. Real flow

Q.

Five points on do not waste food

Q.

Why are children not included in the working population?

Q. Vegetables used by households are goods.

1. capital
2. intermediate
3. consumption
4. Giffen

Q. What is the circular flow of income?

1. It shows the flow of national income in an economy.
2. It shows the flow of income of only an individual.
3. It shows the flow of income of an industry.
4. None of the above.

Q.

To which of the following factors of production does the payment of interest go to?

1. Land

2. Labour

3. Capital

4. Entrepreneurship

Q. There are factors of production.

1. 2
2. 3
3. 4
4. 5

Q.

When money flows out of the Circular Flow Diagram, they are called__________________ .

Q. Define division of labour. What are the two advantages and two disadvantages of division of labour?

Q.

Which of these economic agents supply labour as a factor of production?

1. Governments

2. Households

3. Firms

4. Central Banks

Q.

What Is Meant by Revenue and Expenditure?

Q. In which type of economy do consumers and producers make their choices based only on the market forces of demand and supply?

1. Market economy
2. Open economy
3. Controlled economy
4. Command economy

Q.

When money flows out of the Circular Flow Diagram, the flows are called ___.

Q. Draw a diagram to show the circular flow of income in a two sector model with leakage and injection.

Q. Explain the central problem of 'for whom to produce'.

Q.

Any productive activity that contributes to production and in turn to GDP is called a/an activity.

1. economic
2. non-economic
3. value-add
4. transactional

Q. Take-off is the __________ stage in economic development.

1. Third
2. Fourth
3. Sixth
4. Second

Q. What are the fixed factors of production?

Q. Short Answer Type Questions:
Giving reason identify whether the following are final expenditures or intermediate expenditure:
(i) Expenditure on maintenance of an office building.
(ii) Expenditure on improvement of a machine in a factory.

Q. Define division of labour. Explain one benefit of division of labour.

Q. Which of these is not a factor of production?

1. Land
2. Share script
3. Capital
4. Labour

Q.

How many factors of production exist?

1. 2

2. 4

3. 3

4. 5

Q. Write any two intermediate goods for the production of biscuits.

Q. The activities undertaken to make goods and services are called ___ activities.

1. Production
2. Exchange
3. Distribution
4. Consumption

Q. What are reasons due to which private producers do not take up production of public utilities?

1. It requires huge investment.
2. Returns from sale of utilities is very low.
3. There is no market price, since, utilities are collectively consumed.
4. All of the above.

Q.

The two main blocks of an economy are:

1. Consumers and Producers

2. Goods and Services

3. Money and Finance

4. Coins and Currency

Q. 'REI Agro Food Ltd. is a famous multinational company. Mr. S.K Nagi is its finance manager. He is making efforts to increase the market value of capital invested by the equity shareholders. He already kew it could be possible only when price of the share increases and price of shares increase only if financing, investment and dividend decisions are taken optimally. He did the same and achieved success.
Which objective of financial management has been referred here?

Q. Define labour in economics.

Q.

Which of the following identities holds true?

1. Income = Expenditure + Production

2. Income - Expenditure = Production

3. Income = Expenditure = Production

4. Income + Expenditure = Production