Question

directions match the words in column 1 with their meanings in column 2. write the letter on the line. column 1 column 2 1. market a. something exchanged by all elements of the economy 2. exchange b. a way goods and services are bought and sold 3. circular flow c. a relationship in which business exchanges labor for money 4. resource market d. has a relationship with both business and consumers 5. product market e. an element missing in the circular flow model 6. money f. a model showing exchanges between some elements of the economy 7. the government g. a voluntary agreement in which each side gives and gets something from the other 8. lowered taxes h. results in more money for consumers, but fewer government services 9. theory i. a possible explanation 10. banks j. a relationship in which businesses provide services to consumers 11. consumers k. with consumers and government, the third element in the circular flow model 12. businesses l. also called households in the circular flow model

Explanation:

• Market: A market is a place or a way where goods and services are bought and sold. So, "market" matches with "a way goods and services are bought and sold" (b).
• Exchange: Exchange is a voluntary agreement in which each side gives and gets something from the other. So, "exchange" matches with "a voluntary agreement in which each side gives and gets something from the other" (g).
• Circular flow: Circular flow is a model showing exchanges between some elements of the economy. So, "circular flow" matches with "a model showing exchanges between some elements of the economy" (f).
• Resource market: In the resource market, business exchanges labor (a resource) for money. So, "resource market" matches with "a relationship in which business exchanges labor for money" (c).
• Product market: In the product market, businesses provide services (products) to consumers. So, "product market" matches with "a relationship in which businesses provide services to consumers" (j).
• Money: Money is something exchanged by all elements of the economy. So, "money" matches with "something exchanged by all elements of the economy" (a).
• The government: The government has a relationship with both business and consumers (e.g., through taxes, regulations, and public services). So, "the government" matches with "has a relationship with both business and consumers" (d).
• Lowered taxes: Lowered taxes result in more money for consumers (as they pay less in taxes), but fewer government services (since the government has less revenue). So, "lowered taxes" matches with "results in more money for consumers, but fewer government services" (h).
• Theory: A theory is a possible explanation. So, "theory" matches with "a possible explanation" (i).
• Banks: Banks are an element missing in the basic circular flow model (the basic model has businesses, consumers, and the government). So, "banks" matches with "an element missing in the circular flow model" (e).
• Consumers: Consumers are also called households in the circular flow model. So, "consumers" matches with "also called households in the circular flow model" (l).
• Businesses: Along with consumers and government, businesses are one of the main elements in the circular flow model. So, "businesses" matches with "with consumers and government, the third element in the circular flow model" (k).

Answer:

1. b
2. g
3. f
4. c
5. j
6. a
7. d
8. h
9. i
10. e
11. l
12. k