Ecs 1601 Assignment 1 second semester 2 -2020

Ecs 1601 Assignment 1 second semester 2 -2020 Unique number : Closing Date : 21 August 2020 1.1 The three major flows in any economy are … [1] income, spending and saving. [2] income, government spending and consumption. [3] spending, production and investment. [4] production, income and spending. These are the flows that are discussed in the circular flow model. 1.2 The two major markets in the circular flow of income and expenditure are the … [1] foreign exchange market and factor market. [2] goods market and factor market. [3] goods market and services market. [4] factor market and production market. These are the two markets the goods market is where households purchase goods and services, whilst the Factor market is owned by households who sell factors of productions to firms. 1.3 Which one of the following statements on the remuneration of the factors of production is true? [1] The remuneration for capital is profit, as the business aims to earn a profit on its financial investments. [2] The remuneration for labour is rent, as workers are able to pay their rent with the money they earn. [3] The remuneration for entrepreneurship is a salary, as entrepreneurs are also rewarded for their efforts. [4] The remuneration for natural resources is rent, as natural resources consist of all gifts of nature. The following are different Factors of production and their rewards Natural resources (Land) rent Capital Interest Labour Wages /Salary Entrepreneurship Profit