The Circular Flow Model Demonstrates

question 194

Multiple Choice

The circular flow model demonstrates

• A)the role of the government in overseeing the market system.
• B)the roles played by households and firms in the market system.
• C)how shortages and surpluses are eliminated in a market.
• D)how demand and supply for goods and services are brought into equilibrium.

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Definitions:

Information Processing Perspective

A theory in psychology that likens the human mind to a computer, focusing on how information is taken in, used, and stored.

Efficiency

Relates to the degree of effectiveness with which resources (time, money, effort) are utilized to achieve a goal or perform a task.

Speed of Thought

The rapidness with which one can process information, make decisions, and formulate ideas.

Continuously

Occurring without interruption or cessation.