QUESTION 3: THE CIRCULAR FLOW MODEL 3.1 Study the circular flow below and answer the questions that follow: Foreign sector Money Households boods and services Land, tabor Income Wages, rent. interest Source: Internet images capital Importa Exports Product Markot Government sector B Investment Revenues Output Fectors of production Firma Money Sevings Banking sector 3.1.1 Identify the owners of the factors of production in the diagram. 3.1.2 Through which market does household spending flow? 3.1.3 Give one example of a real flow from the diagram above. 3.1.4 Provide labels for the letters: "A" and "B" in the diagram. (1) (2) 3.1.5 Is this an open economy or a closed economy? Motivate your answer. (2) 3.1.6 What equation would you use to calculate the injections in this economy? (3)
