Q6 Darragh buys a new games console made in Japan. Eimear runs a food company that sells Irish cheese to shops in Spain.


Identify which of these is a leakage and which is an injection. Explain each of your answers.


Q7 Amara earns €1,200 each week from a firm in Limerick. She pays €300 in income tax, saves €200 with her credit union and spends the remaining €700 in Irish shops.


(a) Identify two leakages from the circular flow of income in this example.


1. 2.


(b) Outline what happens to the €700 Amara spends in Irish shops.


Q8 Complete the passage using the word bank below. Mixed


Leakage Public Sector Centrally Planned


Injection Free Market


Circular Flow Of Income


Private Sector


In a ______________________ economy, the government decides how resources are used. In a ______________________ economy, individuals and businesses decide how resources are used, and the government plays a very limited role. Ireland is a ______________________ economy, where both the government and private businesses produce goods and services. Organisations owned and run by the government, such as schools and hospitals, make up the ______________________, while businesses owned by individuals or companies make up the ______________________. The movement of money around the economy between households and firms is called the _______________________________. Savings are a ______________________ because income flows out of the economy. Income from exports is an ______________________ because income flows into the economy.


318 2


STRAND 3


CHAPTER 28: The circular flow of income


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