HOUSE
What are households?
People or families who make economic decisions.
What are businesses (or firms)?
Organisations that produce goods and services for profit.
What are financial institutions?
The sector that manages money in the economy.
What is the circular flow of income?
The model showing how money, goods and services move through the economy.
What is labour?
Households provide this to businesses.
What are wages?
Businesses pay this to workers.
What are share brokers?
Examples include banks, insurance companies and these.
What is the circular flow of income?
Money flowing from households to businesses is called this.
What are savings?
Households put money into banks as this.
What is borrowing money (taking out loans)?
Businesses may do this to expand operations.
Who are savers and borrowers?
Financial institutions connect these two groups.
Who are households?
Goods and services flow from businesses to these people.
What are taxes?
Besides spending, households also pay these to government.
What are land, labour, capital, and enterprise?
One effect if businesses cannot borrow money.
What is the interest margin?
Banks earn profit from the difference between loan and savings rates, called this.
What are loans (investment funds)?
In the 3-sector model, financial institutions provide these to businesses.
What is investment capital/loan funds?
If nobody saved money, businesses
What are land, labour, capital, and enterprise?
The four factors of production named in the lesson.
Jack deposits $10,000 at 5% and Sasha borrows $10,000 at 10%. The bank earns this amount
What is $500?
Explain the full path of money when a household saves.
Households save money → Financial institutions collect savings → Financial institutions lend money to businesses → Businesses invest and grow → Businesses pay wages → Households earn income and spend again.