Question

Rest of the world is the major element in________________.
Select one:
a. Four sector model
b. Two sector model
c. All the above
d. Three sector model

Answer 1

Answer:

a. Four sector model

Explanation:

Hope it helps you.

Answer 2

Rest of the world is the major element in the four sector model, so option a is the correct answer.

• Four sector model is that model which studies the circular flow in an open economy.
• Open economy comprises the business sector, household sector, foreign sector and government sector.
• Among all the sectors, the foreign sector plays an important role in the economy.
• Whenever a domestic business firm exports any services or goods to the foreign markets, injections are made into the circular flow model.
• Beside that, whenever the domestic households, firms or the government imports something from the foreign sector there may be leakage in the circular flow model.