Circular Flow Diagram in Economics: Definition & Example


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question 1 of 3

Who makes up the households in a circular flow diagram?

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1. In a circular flow diagram, who are the firms?

2. Who provides the income in a circular flow diagram?

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About This Quiz & Worksheet

Use your knowledge of the roles and factors involved in circular flow diagrams to complete this quiz. You must pick the correct answer from those provided for each question.

Quiz & Worksheet Goals

Be prepared to answer questions about:

  • What households and firms represent in a circular flow diagram
  • Factors offered by households
  • The information represented in a circular flow diagram

Skills Practiced

You may take this opportunity to practice:

  • Reading comprehension - ensure that you draw the most important information from the related lesson on circular flow diagrams
  • Interpreting information - verify that you can read information regarding who provides the income in circular flow diagrams and interpret it correctly
  • Knowledge application - use your knowledge to answer questions about firms and households

Additional Learning

Circular flow diagrams are discussed further in the lesson designed to aid your understanding of this subject, titled Circular Flow Diagram in Economics: Definition & Example. Studying it will teach you more about:

  • Exactly how the circular flow diagram works
  • The contributions of households and firms in the circular flow diagram
  • Examples that demonstrate the usage of circular flow diagrams