Economics 9708 · AS & A Level
Perfect competition
47 practice questions on Perfect competition, with worked solutions and instant marking.
The table presents some information about an economy. At what point are injections and withdrawals in equilibrium?
Feb/March 2016
What would constitute a rise in leakages or withdrawals from the circular flow of income?
Feb/March 2018
Distinguish between leakages and injections in the circular flow of income, and explore how they may be connected.
Feb/March 2019
Which row correctly shows the injections into a country’s circular flow of income?
Feb/March 2021
Using a circular flow diagram, consider how a decrease in the rate of interest might affect output and employment levels.
Feb/March 2022
Which statement concerning the circular flow of income is correct?
Feb/March 2023
Explain the circular flow of income in a closed economy and consider the extent to which the circular flow of income changes as an economy becomes an open economy.
Feb/March 2023
Which of the following is an injection into an economy’s circular flow of income?
May/June 2012
Which of the following is a leakage from a country’s circular flow of income?
May/June 2012
Which option correctly identifies injections into a country’s circular flow of income?
May/June 2013
Which option correctly names injections into a country’s circular flow of income?
May/June 2013
Which of the following is not considered a leakage from the circular flow of income?
May/June 2014
Which of the following is not counted as a leakage from the circular flow of income?
May/June 2014
Which of the following is not an injection into a country’s circular flow of national income?
May/June 2015
Which option correctly shows leakages from a country’s circular flow of income? (private sector (S > I); public sector (T > G); trade sector (X > M))
May/June 2016
The table concerns an open economy that has a government sector. In which situation is the economy not in equilibrium?
May/June 2017
Which row shows the leakages from a country’s circular flow of income? (private sector (S > I); public sector (T > G); trade sector (X > M))
May/June 2019
A teenager was given a $50 cheque by her parents for her birthday. She deposited the cheque into her savings account at the bank. Why does this gift count as a transfer payment?
May/June 2020
Which change would represent a rise in leakages, or withdrawals, from the circular flow of income?
May/June 2021
Using a circular flow diagram, discuss how an export-led growth strategy could influence the standard of living in a developing economy.
May/June 2022
Using a circular flow diagram, discuss the way a policy of export-led growth could influence the standard of living in a developing economy.
May/June 2022
Explain, with the aid of a circular flow of income diagram, how equilibrium is established in an open economy, and consider whether a budget deficit or a trade deficit is more likely to create lasting disequilibrium.
May/June 2023
In an open economy, injections, J, are added to the circular flow of income, while withdrawals, W, are taken out. If the full employment level of national income is OQ, what shows the inflationary gap?
May/June 2023
The table gives the amounts for the components of an economy’s circular flow of income. component value $m government spending 6 exports 8 investment 9 imports 7 saving 10 tax 5 What conclusion can be drawn about the economy from these figures?
May/June 2024
Using a diagram, explain what is meant by the circular flow of income in an open economy and consider the extent to which it can explain economic growth in such an economy.
May/June 2024
According to the circular flow of income, what condition must exist for an open economy to be in equilibrium?
May/June 2025
Which of the following is not counted as a leakage from the circular flow of income?
Oct/Nov 2010
Which of the following is not classified as a leakage from the circular flow of income?
Oct/Nov 2010
Which option is not a leakage from the circular flow of income?
Oct/Nov 2010
The diagram shows C1 as the link between consumption and national income. What could make the consumption function move to C2?
Oct/Nov 2011
Which row gives the correct net leakages in the circular flow of income? (trade surplus (exports - imports); government budget deficit (government spending - taxes); private sector surplus (saving - investment))
Oct/Nov 2012
Which option correctly names the leakages in a country’s circular flow of income?
Oct/Nov 2013
The figures relate to an open economy with a government sector, where C = consumption expenditure, I = investment, G = government expenditure, X = exports, M = imports, Y = national income. In what situation is the economy in disequilibrium?
Oct/Nov 2013
Which option shows a leakage in an economy’s circular flow of income?
Oct/Nov 2016
Which row accurately shows the net leakages in the circular flow of income?
Oct/Nov 2016
In 2014, a wealthy overseas businessman purchased a UK football club. What would be the immediate impact of such an investment?
Oct/Nov 2017
Which option correctly shows net injections into a country’s circular flow of income? government expenditure > taxation savings > investment exports > imports
Oct/Nov 2017
Which item counts as an injection into a country’s circular flow of income?
Oct/Nov 2019
Which statement correctly shows net leakages from a country’s circular flow of income? (private sector S > I, government sector T > G, trade sector X > M)
Oct/Nov 2020
Which statement gives the correct condition for macroeconomic equilibrium?
Oct/Nov 2020
Which condition indicates net injections into a country’s circular flow of income? (I > S; X < M; G < T)
Oct/Nov 2021
Which changes would expand the circular flow of income? greater imports / greater investment / greater taxation
Oct/Nov 2023
Which change is most likely to raise a country’s circular flow of income?
Oct/Nov 2024
In the circular flow of income model of an economy, Y, C, I, G, X, S, T and M stand for total income, consumption, investment, government expenditure, exports, saving, taxation and imports, respectively. Which statement is correct?
Oct/Nov 2024
Using one or more diagrams, evaluate this claim.
Oct/Nov 2025
Using a diagram, Evaluate the effects on consumers and producers of a rise in market contestability.
Oct/Nov 2025
In perfect competition, subnormal and supernormal profits are seen only in the short run.
Oct/Nov 2025