TOPIC 2: CIRCULAR FLOW ACTIVITY 1 MULTIPLE CHOICE Choose the correct answer by writing down the correct letter in your answer book. E.g. 1. E 1.1 The factors of production in a circular flow are owned by... a) Labour b) Business c) Households d) Foreign Subsidies are provided by ... to other participants. a) Labour b) Govemment c) Households d) Business The market for short-term loans and savings is known as ... market. a) Money b) Capital c) Factor d) Goods The market where goods and services are traded is known as ... a) Factor market b) Money market c) Product market d) Capital market An economy that has no foreign sector is known as

Sure, I'd be happy to help you with the multiple-choice questions on the topic of Circular Flow. Here are the answers: --- **1.1 The factors of production in a circular flow are owned by...** **c) Households** *Explanation:* In the circular flow model, households own the factors of production (land, labor, capital, and entrepreneurship) and provide them to businesses in exchange for income. --- **2. Subsidies are provided by ... to other participants.** **b) Government** *Explanation:* Subsidies are financial supports given by the government to businesses, households, or other sectors to encourage certain activities or reduce the cost of goods and services. --- **3. The market for short-term loans and savings is known as ... market.** **a) Money** *Explanation:* The money market is where short-term borrowing and lending take place, typically involving instruments like Treasury bills, commercial paper, and certificates of deposit. --- **4. The market where goods and services are traded is known as ...** **c) Product market** *Explanation:* The product market is where businesses sell goods and services to households, governments, and other organizations. --- **5. An economy that has no foreign sector is known as...** **Closed Economy** *Explanation:* A closed economy does not engage in international trade or have any foreign interactions. All production and consumption occur within the country's borders without any imports or exports. --- Feel free to ask if you need further explanations or assistance with other questions!