The Two Sectors of the Economy in the Simple Circular

question 346

Multiple Choice

The two sectors of the economy in the simple circular flow model are

• A) the employed and the unemployed.
• B) foreign markets and domestic markets.
• C) households and businesses.
• D) the private sector and the public sector.

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Definitions:

Bundle

A group or collection of items that are offered together as a single package.

Laspeyres Price Index

A price index that measures the relative price change of a basket of goods and services, using the quantities from the base period.

Per Capita Income

An average income earned per person in a given area (city, region, country) in a specified year, often used as an indicator of the economic health of a region.

Laspeyres Price Index

The Laspeyres Price Index measures the change in the price of a basket of goods and services over time, using the quantities of the base period.