Details Title: 5201 Midterm Study- Questions on the circular flow diagram Description: Questions on the circular flow diagram Total Flash Cards: 9 Created: 06/30/2009 20:13:35		New Users: To study from this flashcard set, or to create your own your own study flash cards, REGISTER HERE. Existing Users: CLICK HERE. Additional Political Studies Flashcards
Cards in this set: Term {image:97783|center} Definition Term We begin by sorting individuals into Factors of production in the economy are lumped into three broad categories, land, labor and capital. The names for the prices of labor, land and capital are wages, rent and profit. two groups: 1 2. Definition Firms and Households Term Good and services only flow around the economy in one direction; money flows in the ______direction. Idea: Definition opposite Idea: Money is normally exchanged for goods and services, or resources. Term Factors of production in the economy are lumped into three broad categories: 1. 2. 3. Definition land, labor and capital. Term The names for the prices of labor, land and capital are 1. 2. 3. Definition wages, rent and profit. Term In this model, ________ own all the labor, land and capital. Definition Households Term In markets for factors of production, households _____ the services of labor, land and capital in exchange for wages, rent and profits. Definition sell Term -What are the two functions of households in the economy? Definition 1. to sell their labor, land, and capital, in order to make income, 2. they spend their income on the goods and services that firms produce. Term What are the two functions of firms in the economy? Definition 1.They purchase the services of labor, land and capital 2. They use the labor, land and capital to produce goods and services, which they sell to households.