BA 201
ASSIGNMENT 2
Research about the following: (30pts)
1. Circular flow of economic activity (its players)
Is a model showing the basic relationship within a market economy .it shows where money goes
and what it exchange for .The model includes households, businesses and government ,and the banking
system.
2. The banking system
Facilitates the exchange of money, and help to productivity turns savings into investments in
order to grow the economy.
3. Money
Use to purchase goods and services
4. Factors of production
Land , labor ,capital, entrepreneurship ,the prices that corresponds to this factors are rent
,wages and profit .
5. Macroeconomics
Deals with the behaviour of various economic variables that refer to the economy as a whole
.These variables are total national economic ,aggregate employment ,the extent to which the
economy’s resources are being fully employed ,aggregate saving and investment ,and the
general price level in the economy .
6. Household
Buy goods and services from business in attempt to satisfy their unlimited needs and wants.
Households sells their labor , land ,and capital in exchange for income that they use to buy
goods and services that firms produce .
7. Government
Levy taxes on households and business in order to provide certain benefits to everyone .