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QLDEconomicsQuick questions
Unit 1: Markets and models
Quick questions on The circular flow of income model (QCE Economics Unit 1)
6short Q&A pairs drawn directly from our worked dot-point answer. For full context and worked exam questions, read the parent dot-point page.
What are the five sectors?Show answer
The full model has five sectors:
What is injection?Show answer
Spending added to the domestic stream from outside consumption: investment, government spending, exports.
What is equilibrium income?Show answer
The level of national income at which total injections equal total leakages.
What is q1?Show answer
Identify the three leakages and the three injections in the five-sector circular flow model. [3 marks]
What is q2?Show answer
Explain, using the circular flow model, what happens to the level of national income when total injections exceed total leakages. [4 marks]
What is q3?Show answer
A mining boom raises Australian exports. Using the circular flow, trace the effect on national income and explain why income rises by more than the initial increase in exports. [5 marks]
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