The Outer Loop of the Simple Circular flOw of Income

question 75

Multiple Choice

The outer loop of the simple circular flow of income, comprising only households and firms, captures the flow of _____.

• A) taxes and government spending
• B) wages and spending on goods and services
• C) savings and investments
• D) exports and imports

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Definitions:

Divergent Plate Boundary

A region where two tectonic plates move away from each other, leading to the creation of new crust as magma rises to the surface.

Offset Stream Channel

A stream or river channel that has been shifted laterally due to tectonic movement, creating a visible displacement along a fault line.

Active Faults

Faults that have moved recently (in geological terms) and are likely to experience future earthquakes.

Scarp

1. A linear or curved scar left behind by a landslide on a hillslope, marking where the landslide pulled away from the rest of the hill. 2. A break or step in the land surface formed by movement along a fault (fault scarp).