3. Explain the difference between the stock of money and the flow of income. 4. Define opportunity cost using your own examples. 5. Distinguish between productive efficiency and allocation efficiency. Good Luck! MacBook AirC. Factor incomes. D. Consumption. 5. What are the two basic markets shown by the simple circular flow model? A. Capital goods and consumer goods. B. Private and public goods. C. Product and factor. D. Household and business. E. Competitive and monopolistic. 6. Which of the following is true in the factor market? A. Businesses borrow funds from households. B. Businesses sell resources to households. C. Businesses buy consumer goods from households. D. Businesses buy resources from households. 7. What is the product market? A. The market for goods but not services. B. The market for consumer goods and services. C. The market for consumer goods and services and investment goods. D. The market for consumer goods and services, investment goods and capital goods. 8. What is the factor market? A. The market for investment goods. B. The market for investment goods and exports. C. The market for consumer goods and services. D. The market for factor services. 9. What is the distinction between money and income? A. They are synonymous. B. Income is a stock concept and money is a flow concept. C. Income is a flow concept and money is a stock concept. D. Both can be used to purchase goods and services.Multiple Choice Questions (2) Business Sector (3) (4) 1. Refer to the above to answer this question. What is flow (1)? A. Consumer goods and services. B. Factor services. C. Factor incomes. D. Consumption. 2. Refer to the above to answer this question. What is flow (2)? A. Consumer goods and services. B. Factor services. C. Factor incomes. D. Consumption. 3. Refer to the above to answer this question. What is flow (3)? A. Consumer goods and services. B. Factor services. C. Factor incomes. D. Consumption. 4. Refer to the above to answer this question. What is flow (4)? A. Consumer goods and services. B. Factor services.14. What is that portion of income which is not spent on consumption? A. A leakage. B. An injection. C. Savings. D. Dissavings. 15. What is income received within the circular flow which does not flow directly back to the business sector? A. Dissavings. B. Either investment or exports. C. An injection. D. A leakage. 16. What is the term for spending on new capital goods? A. Consumer durables. B. Investment. C. Consumption. D. Factor incomes. 17. What is an injection? A. Any spending that is dependent on the current level of income. B. Any flow of money that comes directly from financial intermediaries. C. The flow of money that comes directly from the central bank. D. Any spending that is not dependent on the current level of income. MaM 18. All of the following, except one, are injections. Which is the exception? A. Investment. B. Taxes. C. Exports. D. Government purchases. 19. What is a leakage? A. Income received within the circular flow that does not flow directly back. B. Any spending that is dependent on the current level of income. C. The total amount of income that goes to financial intermediaries. D. Any spending that is not dependent on the current level of income. 20. All of the following, except one, are examples of financial securities. Which is the exception? A. A mortgage obtained from a bank. B. A certificate of deposit. C. A government bond. D. An equity stock. Short Answer Questions (Please write in your own words) 1. Distinguish between savings and investment. 2. What are two things that are true when an economy is in equilibrium? Page 4 / 5 + MacBook At10. Which of the following is a medium of exchange which is widely accepted? A. Money. B. Income. C. Either money or income. D. Either money, income or investment. 1 1. Which of the following are the earnings of factors of production expressed as an amount per period of time? A. Money. B. Income. C. Either money or income. D. Either money, income or investment. 12. What is consumption? A. The amount by which the capital stock is used up each year. B. The amount by which the stock of consumer durables is used up each year. C. The expenditure by households on goods and services. D. The expenditure by firms on goods and services. 13. Which of the following is true of savings? A. Savings occur for reasons similar to the reasons firms invest. B. Savings take the form of money that is deposited with financial intermediaries. C. Savings are defined as that portion of income which is not spent on consumption. D. None of these